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12026683

SEC

Mail Processing

Section

APR 112012

Washington DC405

CuBESMARTself storage logistics

2011 Annual Report

CuE3SMself storage logistics

CUBESIVIARTSM NYSE CUBE

Corporate Overview

CubeSmart is self-administered and self-managed real estate investment trust focused

on the ownership operation acquisition and development of self-storage facilities in

the United States

The Companys self-storage facilities are designed to offer affordable easily accessible

and secure storage space for residential and commercial Customers The Companys

goal is to provide the highest standard of facilities and service in the industry The

Company plans to exceed Customer expectations with the addition of more

personalized services and technology CubeSmart services include storage

customization logistics services comprehensive moving services organizational

services and office amenities

According to the 2011 Self-Storage Almanac CubeSmart is one of the top four owners

and operators of self-storage facilities in the United States At December 31 2011 the

company owned 370 facilities that contained an aggregate of 24.4 million square feet

and managed another 103 facilities on behalf of third party owners

Mission Statement

CubeSmart is real estate investment trust engaged in acquiring developing and

managing portfolio of quality self-storage facilities throughout the United States and

selected major markets worldwide We are committed to providing dynamic and

balanced environment in which dedicated and empowered employees are motivated to

create the ultimate Customer experience We will operate in our communities with

integrity and the highest ethical standards We will grow profitably through capital

allocation initiatives that maximize shareholder value

Letter from the Chairman of the Board

To Our Shareholders

It is said that rising tide lifts all boats Of

course tides are predictable and can as such

lend themselves to planning Floods

however are another matter While they too

will lift all boats they often destroy all but

the sturdiest little over five years ago

when unexpectedly assumed the

Chairmanship of your company our boat was

not the sturdiest and an economic flood of

gigantic proportion was in the offing The

next 18-24 months were largely spent

keeping the boat afloat That trying time

period gave birth to resolve not only to

survive but as importantly to build

company capable of riding out the toughest

of future storms

We inaugurated once-a-year Board retreat

where we laid out 5-year strategy for the

Company That strategy contained near- and

long-term goals which we shared with the

investment community as our way of

disciplining ourselves and keeping our

investors current with our plans The

implementation of that strategy has been in

short transformational Our boat has

become ship capable of riding out difficult

economic times and boarding growing

share of the market in normal economic

times

Like most broad maxims rising tide lifts all

boats is not always correct As my fellow

Board member and our CEO Dean Jernigan

notes in his letter to you our industry is

entering period of consolidation because

smaller operators are finding it increasingly

difficult to compete This is largely

occasioned by the advent towards Internet

advertising away from the yellow pages

which rewards companies with many stores

and national footprint The economist

Joseph Alois Schumpeter would call this

entrepreneurial creative destruction at

work Led by Dean and our President Chris

Marr we are trying our own entrepreneurial

hand at creative destruction by abandoning

the traditional passive storage model for

our business Customers Our Super Stores

are largely aimed at increasing our

commercial Customer base Commercial

Customers stay longer and rent more square

feet than the average individual Customer

We have head start on this effort vis-a-vis

our large competitors and believe it will be

difficult for smaller operators to launch

similar programs because of cost and lack of

national footprint

Both literally and figuratively the old U-

Store-It has become CubeSmart name

that marks this companys operational

financial and portfolio transformation Key

drivers of this transformation emanating

from our strategic goals agenda in 2011

included

Establishing dominant New York City

position through $560 million

acquisition of 22 exceptional storage

assets

Continuing the execution of our capital

recycling objectives with $127 million in

additional core market acquisitions and

$45.2 million in strategic dispositions

Growing the size of our third party

management platform by 20%

Receiving investment grade credit ratings

from Moodys and SPRaising more than $1 billion in capital

from variety of sources and

Introducing the CubeSmart brand and

enhanced service model

Another long-term objective has been to

enhance the quality and growth profile of this

companys cash flows through disciplined

capital recycling program Since 2008 we

have sold some $234 million in assets located

predominantly in tertiary markets and

excluding our transformational New York City

acquisition have redeployed nearly equal

amount of capital $240 million into more

attractive core markets As result of

these capital redeployments and including

our now dominant position in New York City

approximately 60% of our cash flow currently

comes from core markets This is up from

40% in 2008 and positions CubeSmart for

more robust long-term organic growth

Our third party management program

established in 2010 augments our

investment activities by enabling us to

develop meaningful relationships with private

operators while generating profitable cash

flow stream From our start in 2010 without

any assets under management we ended the

year with 103 stores in our program the

second largest in the self-storage industry

The third party management platform clearly

contributed to our investment pipeline in

2011 as nearly half of our non-New York 2011

transaction value was sourced directly from

managed properties

To support our growth we have built

healthy balance sheet by continuing to

execute on our articulated objective of

enhancing our credit profile and pursuing an

unsecured strategy that affords flexibility and

an improved long-term cost of capital

Notably in 2011 the strength and flexibility

of our balance sheet was affirmed by the

assignment of investment grade credit ratings

from both Moodys and Standard Poors

and our ability to fund meaningful growth

was demonstrated by our successful

execution of more than $1 billion in capital

raising including $202.5 million net

secondary equity offering $74.8 million

net debut preferred equity offering and

$800 million in unsecured bank financings

As look back at this companys dramatic

transformation over the past five years and

consider the strength and promise of its

current position am delighted with the

capability and perseverance of our team and

the continued support of our stakeholders

CubeSmart is in the strongest position in its

history and am excited about the

opportunity ahead of us

Sincerely

Je r442William Diefenderfer Ill

Chairman of the Board

clARr

Letter from the Chief Executive Officer

Dear Fellow Shareholders

This was great year to be in the self-storage

business Over the course of my 28 years in this

industry have uttered these words many times but

they ring just as true today as they ever have The

difference now however is that they only apply to

select few within our industry those with the scale

and systems to compete This growing competitive

divide combined with continued fundamental

stability and limited new supply has created

significant opportunity for CubeSmart and presents

an attractive landscape for prospective growth

The plight of the small operator is no secret As

Customers become more reliant upon and

empowered by technology operators like

CubeSmart who have sophisticated marketing

platforms capable of targeting reaching and

attracting Customers are taking market share We

have seen this transpire in the relative performance

metrics of private and public operators helping to

support performance in relatively stagnant

economic climate

This widening performance gap has enhanced not

only the operating results of our Company but also

our external growth opportunities as smaller

operators turn to us for either third party

management services or an efficient exit When

combining these secular forces with the significant

fragmentation that still defines our industry as well

as the absence of any meaningful new supply the

industry seems poised for consolidation

CubeSmart is positioned to participate meaningfully

in this consolidation Our third party management

platform and deep industry relationships continue to

provide an attractive pipeline for acquisition

opportunities our experienced investment team and

active portfolio management process enable us to

grow in disciplined and profitable manner and our

focus on maintaining an unsecured investment-

grade balance sheet gives us both flexibility in

funding our growth and nimbleness in our

investment approach Notably our $560 million off-

market acquisition of 22 assets located

predominantly in the greater New York City area

helped to demonstrate these advantages while

solidifying CubeSmart as the buyer of choice for

many future sellers

Of course strong operational foundation is

required to support the meaningful external growth

that we anticipate and we have an exceptional

platform in place The rapid and successful

integration of more than 100 managed stores since

2010 and the ability to accommodate more than $1

billion in transaction volume since 2008 demonstrate

the scalability and adaptability of our marketing

revenue management information technology and

operational processes and systems

Importantly although we have an exceptional

platform in place we continually strive for

improvement We did this in 2011 by challenging

the status quo with the introduction of our

enhanced service model effectively taking the self

out of self-storage for an increasingly discerning and

time-constrained Customer Furthermore in an

industry riddled with Lock Secure and

Safe clichØ we differentiated our company in an

evolving marketplace with the rollout of

CubeSmartSM breakout brand which embodies our

ingenuity and focus on the future

From where we sit today the future looks bright for

CubeSmart and ultimately our shareholders

Sincerely

Dean Jernigan

Chief Executive Officer

CuSMARTSM

self storage logistics

UNITED STATES

SECURITIES AND EXCHANGE COMMISSIONWashington DC 20549

FORM 10-K

EKI ANNUAL REPORT PURSUANT TO SECTION 13 OR 15d OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31 2011

OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15d OF THE SECURITIES EXCHANGE ACT OF

1934

For the transition period from to

Commission file number 001-32324 CubeSmartCommission file number 000-54662 CubeSmart L.P

CUBESMARTCUBE SMART L.P5

Exact Name of Registrant as Specified in Its Charter

Maryland CubeSmart 20-1024732 CubeSmart

Delaware CubeSmart L.P 34-1837021 CubeSmart L.PState or Other Jurisdiction of IRS Employer

Incorporation or Organization Identification No

460 East Swedesford Road

Suite 3000

Wayne Pennsylvania 19087

Address of Principal Executive Offices Zip Code

Registrants telephone number including area code 6t0 293-5700

Securities registered pursuant to Section t2b of the Act

Title of each class Name of each exchange on which registered

Common Shares $0.01 par value per share of CubeSmurt New York Stock Exchange

7.75% Series Cumutative Redeemable New York Stock Exchange

Preferred Shares of Beneficial Interest par value $.0t per share of CubeSmart

Securities registered pursuant to Section 12g of the Act Units of General Partnership Interest of CubeSmart LP

Indicate by check mark if the registrant is welt-known seasoned issuer as defined in Rate 405 of the Securities Act

CubeSmarl Yes No

CubeSmart L.P Yes RI NoD

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15d of the Act

CubnSoiart Yes No RI

CubeSmarl L.P Yes No RI

Indicate by check mark whether the registrant has filed all reports required to be filed by Section 13 or 15d of the Securities Exchange Act of 1934 during the preceding 12 months and has been subject to

such filing reqairements for the past 90 days

CubeSmart Yes RI No

CubeSmart L.P Yes RI No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site if any every Interactive Data Filereqaired to be submiBed and posted pursuant

to Rule 405 of

Regulation S-T during the preceding t2 months or for such shorter period that the registrant was required to submit andpost

such files

CubeSmart Yes RI No

CubeSmart L.P Yes RI NoD

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is nol contained herein and will not be contained to the besl of registrants knowledge definitive proxy or

information statements incorporated by reference in Part Ill of this Form 10-K or anyamendment to this Form 10-K

CabeSmart Yes RI No

CubeSmart L.P Yes RI No

Indicate by check mark whether the registrant is large accelerated filer an accelerated filer non-accelerated filer or smaller reporting company See definitions oflarge accelerated filer accelerated filer and

smaller reporting company in Rule 128-2 of the Exchange Act

CabeSnaurt

Large accelerated filer RI Acceleraled filer Non-accelerated filer Smaller reporting company

CubeSmart L.P

Large accelerated filer Accelerated filer Non-accelerated filer RI Smallerreporltng company

Indicate by check mark whether the registrant is shellcompany as defined in Rule l2b-2 of the Exchange Act

CubeSmart Yes No II

CubeSmart L.P Yes No III

As of June 30 2011 the last business day of CubeSmarts most recently completed second fiscal quarter the aggregate market value of common shares held by non-affiliates of CubeSmart was $1039945763 As of

February 27 2012 the number of common shares of CubeSmart outstanding was 122851716

As of June 30 2011 theaggregate

market value of the 4729136 units of limited partnership the Units held by non-affiliates of CubeSmart L.P was $497505t based uponthe last reported sale

priceof $10.52

pershare on the New York Stock Exchange on June 30 2011 of Ihe common shares of CubeSmurt the sole general partaer of CubeSmart L.P For this computation the market value of all Units beneficially owned by

CubeSmart has been excluded

Documents incorporated by reference Portions of the Proxy Statement for the 2012 Annual Meeting of Shareholders of CuheSmart lobe filed subsequenlly with the SEC are incorporated by reference into Part III of

this report

EXPLANATORY NOTE

This report combines the annual reports on Form 10-K for theyear

ended December 31 2011 of CubeSmart the Parent

Company or CubeSmart and CubeSmart L.P the Operating Partnership The Parent Company is Maryland real estate

investment trust or REIT that owns its assets and conducts its operations through the Operating Partnership Delaware limited

partnership and subsidiaries of the Operating Partnership The Parent Company the Operating Partnership and their consolidated

subsidiaries are collectively referred to in this report as the Company In addition terms such as we us or our used in this

report may refer to the Company the Parent Company or the Operating Partnership

The Parent Company is the sole general partner of the Operating Partnership and as of December 31 2011 owned 96.3%

general partnership interest in the Operating Partnership The remaining 3.7% interest consists of common units of limited partnership

issued by the Operating Partnership to third parties in exchange for contributions of properties to the Operating Partnership As the

sole general partner of the Operating Partnership the Parent Company has full and complete authority over the Operating

Partnerships day-to-day operations and management

Management operates the Parent Company and the Operating Partnership as one enterprise The management teams of the

Parent Company and the Operating Partnership acting through its general partner are identical

There are few differences between the Parent Company and the Operating Partnership which are reflected in the note

disclosures in this report The Company believes it is important to understand the differences between the Parent Company and the

Operating Partnership in the context of how these entities operate as consolidated enterprise The Parent Company is REIT whose

only material asset is its ownership of the partnership interests of the Operating Partnership and subsidiaries of the Operating

Partnership As result the Parent Company does not conduct business itself other than acting as the sole general partner of the

Operating Partnership issuing public equity from time to time and guaranteeing the debt obligations of the Operating Partnership and

subsidiaries of the Operating Partnership The Operating Partnership holds substantially all the assets of the Company and directly or

indirectly holds the ownership interests in the Companys real estate ventures The Operating Partnership conducts the operations of

the Companys business and is structured as partnership with no publicly traded equity Except for net proceeds from equity

issuances by the Parent Company which are contributed to the Operating Partnership in exchange for partnership units the Operating

Partnership generates the capital required by the Companys business through the Operating Partnerships operations by the

Operating Partnerships direct or indirect incurrence of indebtedness or through the issuance of partnership units of the Operating

Partnership or equity interests in subsidiaries of the Operating Partnership

The Company believes that combining the annual reports on Form 10-K of the Parent Company and the Operating

Partnership into single report will

facilitate better understanding by the investors of the Parent Company and the Operating Partnership by enabling them to

view the business as whole in the same maimer as management views and operates the business

remove duplicative disclosures and provide more straightforward presentation in light of the fact that substantial portion

of the disclosure applies to both the Parent Company and the Operating Partnership and

create time and cost efficiencies through the preparation of one combined report instead of two separate reports

In order to highlight the differences between the Parent Company and the Operating Partnership the separate sections in this

report for the Parent Company and the Operating Partnership specifically refer to the Parent Company and the Operating Partnership

In the sections that combine disclosures of the Parent Company and the Operating Partnership this report refers to such disclosures as

those of the Company Although the Operating Partnership is generally the entity that directly or indirectly enters into contracts and

real estate ventures and holds assets and debt reference to the Company is appropriate because the business is one enterprise and the

Parent Company operates the business through the Operating Partnership

As general partner with control of the Operating Partnership the Parent Company consolidates the Operating Partnership for

financial reporting purposes The Parent Company does not have significant assets other than its investment in the Operating

Partnership The substantive difference between the Parent Companys and the Operating Partnerships filings is the fact that the

Parent Company is REIT with public shares while the Operating Partnership is partnership with no publicly traded equity In the

financial statements this difference is primarily reflected in the equity or capital for Operating Partnership section of the

consolidated balance sheets and in the consolidated statements of equity or capital and comprehensive income loss Apart from the

different equity treatment the consolidated financial statements of the Parent Company and the Operating Partnership are nearly

identical The separate discussions of the Parent Company and the Operating Partnership in this report should be read in conjunction

with each other to understand the results of the Companys operations on consolidated basis and how management operates the

Company

This report also includes separate Item 9A Controls and Procedures disclosures and separate Exhibit 31 and 32

certifications for each of the Parent Company and the Operating Partnership in order to establish that the Chief Executive Officer and

the Chief Financial Officer of each entity have made the requisite certifications and that the Parent Company and Operating

Partnership are compliant with Rule 13a-15 or Rule 15d-15 of the Securities Exchange Act of 1934 as amended and 18 U.S.C

1350

TABLE OF CONTENTS

PARTI

Item Business

Item lA Risk Factors 11

Item lB Unresolved Staff Comments 22

Item Properties 22

Item Legal Proceedings31

Item Mining Safety Disclosures 31

PART II 32

Item Market for Registrants Common Equity Related Shareholder Matters and Issuer Purchases of 32

Equity Securities

Item Selected Financial Data 34

Item Managements Discussion and Analysis of Financial Condition and Results of Operations 39

Item 7A Quantitative and Qualitative Disclosures About Market Risk 51

Item Financial Statements and Supplementary Data 52

Item Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 52

Item 9A Controls and Procedures 52

Item 9B Other Information 53

PART III 53

Item 10 Trustees Executive Officers and Corporate Governance 53

Item 11 Executive Compensation 53

Item 12 Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters 54

Item 13 Certain Relationships and Related Transactions and Trnstee Independence 54

Item 14 Principal Accountant Fees and Services 54

PART IV 54

Item 15 Exhibits and Financial Statement Schedules 54

PART

Forward-Looking Statements

This Annual Report on Form 10-K and other statements and information publicly disseminated by the Parent Company and the

Operating Partnership contain certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 as

amended and Section 21 of the Securities Exchange Act of 1934 as amended the Exchange Act Such statements are based on

assumptions and expectations that may not be realized and are inherently subject to risks uncertainties and other factors many of

which cannot be predicted withaccuracy

and some of which might not even be anticipated Although we believe the expectations

reflected in these forward-looking statements are based on reasonable assumptions future events and actual results performance

transactions or achievements financial and otherwise may differ materially from the results performance transactions or

achievements expressed or implied by the forward-looking statements Risks uncertainties and other factors that might cause such

differences some of which could be material include but are not limited to

national and local economic business real estate and other market conditions

the competitive environment in which we operate including our ability to raise rental rates

the execution of our business plan

the availability of external sources of capital

financing risks including the risk of over-leverage and the corresponding risk of default on our mortgage and other debt and

potential inability to refinance existing indebtedness

increases in interest rates and operating costs

counterparty non-performance related to the use of derivative financial instruments

our ability to maintain our status as REIT for federal income tax purposes

acquisition and development risks

increases in taxes fees and assessments from state and local jurisdictions

changes in real estate and zoning laws or regulations

risks related to natural disasters

regulatory risk- Securities and Exchange Commission the SEC/Governance

potential environmental and other liabilities

other factors affecting the real estate industry generally or the self-storage industry in particular and

other risks identified from time to time in other reports we file with the SEC or in other documents that we publicly disseminate

We undertake no obligation to publicly update or revise these forward-looking statements whether as result of new information

future events or otherwise except as may be required by applicable securities laws

ITEM BUSINESS

Overview

We are self-administered and self-managed real estate company focused primarily on the ownership operation management

acquisition and development of self-storage facilities in the United States

As of December 31 2011 we owned 370 self-storage facilities located in 26 states and in the District of Columbia containing an

aggregate of approximately 24.4 million rentable square feet As of December 31 2011 approximately 78.4% of the rentable square

footage at our owned facilities was leased to approximately 173000 tenants and no single tenant represented significant

concentration of our revenues As of December 31 2011 we owned facilities in the District of Columbia and the following 26 states

Alabama Arizona California Colorado Connecticut Florida Georgia Illinois Indiana Louisiana Maryland Massachusetts

Michigan Mississippi Nevada New Jersey New Mexico New York North Carolina Ohio Pennsylvania Tennessee Texas Utah

Virginia and Wisconsin In addition as of December 31 2011 we managed 103 properties for third parties bringing the total number

of properties we owned and/or managed to 473 As of December 31 2011 we managed facilities in the District of Columbia and the

following 26 states Arkansas California Colorado Connecticut Delaware Florida Georgia Illinois Massachusetts Maryland

Michigan New Hampshire Minnesota New Jersey New York Ohio Pennsylvania Rhode Island Texas and Virginia

Our self-storage facilities are designed to offer affordable and easily-accessible storage space for our residential and commercial

customers Our customers rent storage cubes for their exclusive use typically on month-to-month basis Additionally some of our

facilities offer outside storage areas for vehicles and boats Our facilities are designed to accommodate both residential and

commercial customers with features such as wide aisles and load-bearing capabilities for large truck access All of our facilities have

an on-site manager during business hours and 255 or approximately 69% of our facilities have manager who resides in an

apartment at the facility Our customers can access their storage cubes during business hours and some of our facilities provide

customers with 24-hour access through computer controlled access systems Our goal is to provide customers with the highest

standard of facilities and service in the industry To that end approximately 72% of our facilities include climate controlled cubes

compared to the national average of 36% reported by the 2011 Self-Storage Almanac

The Parent Company was formed in July 2004 as Maryland REIT The Parent Company owns its assets and conducts its business

through its operating partnership CubeSmart L.P our Operating Partnership and its subsidiaries The Parent Company controls

the Operating Partnership as its sole general partner and as of December 31 2011 owned an approximately 96.3% interest in the

Operating Partnership The Operating Partnership has been engaged in virtually all aspects of the self-storage business including the

development acquisition management ownership and operation of self-storage facilities

Acquisition and Disposition Activity

As of December 31 2011 and 2010 we owned 370 and 363 facilities respectively that contained an aggregate of 24.4 million and

23.6 million rentable square feet with occupancy rates of 78.4% and 76.3% respectively

On October 24 2011 we entered into purchase agreement with the ownership entities to acquire portfolio of 22 self-storage

facilities branded under the name Storage Deluxe that contain an aggregate of approximately 1.6 million rentable square feet the

Storage Deluxe Acquisition The aggregate purchase price for all the properties in the Storage Deluxe Acquisition is approximately

$560 million comprised of approximately $472 million payable in cash and the assumption of approximately $88 million of existing

fixed-rate debt On November 2011 we acquired 16 of the properties for approximately $357.3 million The 16 properties

purchased are located in New York Connecticut and Pennsylvania We anticipate closing on the purchase of the remaining properties

with purchase price of approximately $202.7 million including the assumption of $88 million of secured fixed-rate debt

immediately following completion of the loan assumption process which we expect to conclude during the first quarter of 2012

complete listing of and additional information about our facilities is included in Item of this Annual Report on Form 10-K

The following is summary of our 2011 2010 and 2009 acquisition and disposition activity

Purchase Sales

Facility/Portfolio Location Transaction Date Number of Facilities Price in thousands

2011 Acquisitions

Burke Lake Asset Fairfax Station VA January 2011 14000

West Dixie Asset Miami FL April 2011 13500

White Plains Asset White Plains NY May 2011 23000

Phoenix Asset Phoenix AZ May 2011 612

Houston Asset Houston TX June 2011 7600

Duluth Asset Duluth GA July 2011 2500

Atlanta Assets Atlanta GA July 2011 6975

District Heights Asset District Heights MD August 2011 10400

Storage Deluxe Assets Multiple locations in NYCT PA and VA November2011 16 357310

Leesburg Asset Leesburg VA November 2011 13000

Washington DC Asset Washington DC December 2011 18250

27 467147

2011 Dispositions

Flagship Assets Multiple locations in IN and

OH August2011 18 43500

Portage Asset Portage MI November 2011 1700

19 45200

2010 Acquisitions

Frisco Asset Frisco TX July 2010 5800

New York City Assets New York NY September 2010 26700

Northeast Assets Multiple locations in NJ NYand MA November2010 18560

Manassas Asset Manassas VA November 2010 6050

Apopka Asset Orlando FL November 2010 4235

Wyckoff Asset Queens NY December2010 13600

McLearen Asset McLearen VA December 2010 10200

12 85145

2010 Dispositions

Sun City Asset Sun City CA October 2010 3100

Inland Empire/Fayetteville Assets Multiple locations in CA amd

NC December2010 15 35000

16 38100

2009 Dispositions

68th Street Asset Miami FL January 2009 2973

Albuquerque NM Asset Albuquerque NM April 2009 2825

Palmetto Asset Ontario CA June 2009 5925

Hotel Circle Asset Albuquerque NM July 2009 3600

Jersey City Asset Jersey City NJ August 2009 11625

Dale Mabry Asset Tampa FL August 2009 2800

Winner Assets Multiple locations in CO September 2009 17300

Baton Rouge Asset

Eminent Domain Baton Rouge LA September 2009 1918

North Street Asset

Eminent Domain San Bernardino CA September 2009

Boulder Assets Boulder CO September 2009 32000

Winner Assets Multiple locations in CO October 2009 6600

Brecksville Asset Brecksville OH November 2009 3300

20 90866

The Company provided $17.6 million in seller financing to the buyer as part of the Boulder Assets disposition which was

subsequently repaid during 2010

Approximately one third of the Baton Rouge Asset was taken in conjunction with eminent domain proceedings The

Company continues to own and operate the remaining two thirds of the asset and includes the asset in the Companys total

portfolio property count

The entirety of the North Street Asset was taken in conjunction with eminent domain proceedings and the Company

removed this asset from its total portfolio asset count During 2011 the Company received compensation from the state of

California Accordingly the Company recognized $1.9 million of income during 2011

The comparability of our results of operations is affected by the timing of acquisition and disposition activities during the periods

reported At December 31 2011 and 2010 we owned 370 and 363 self-storage facilities and related assets respectively The

following table summarizes the change in number of owned self-storage facilities from January 2010 through December 31 2011

2011 2010

Balance January 363 367

Facilities acquired

Facilities sold_______________ _______________

Balance March 31 364 367

Facilities acquired

Facilities consolidated

Facilities sold_______________ _______________

Balance June 30 367 367

Facilities acquired

Facilities sold 18 ______________Balance September 30 353 370

Facilities acquired 18

Facilities sold 16Balance-December 31 370 363

Financing and Investing Activities

The following summarizes certain financing activities during the year ended December 31 2011

Storage Deluxe Acquisition On November 2011 we acquired 16 properties from Storage Deluxe with purchase price of

approximately $357.3 million The 16 properties purchased arc located in New York Connecticut and Pennsylvania In

connection with this acquisition we allocated portion of the purchase price to the intangible value of in-place leases which

aggregated $18.1 million

Facility Acquisitions In addition to the Storage Deluxe Acquisition during the year ended December 31 2011 we acquired

11 self-storage facilities located throughout the United States for an aggregate purchase price of approximately $109.8

million In connection with these acquisitions we allocated portion of the purchase price to the intangible value of in-place

leases which aggregated $7.0 million

Facility Dispositions During the year ended December 31 2011 we sold 19 self-storage facilities located throughout

Indiana Ohio and Michigan for an aggregate sales price of approximately $45.2 million These sales resulted in the

recognition of gains that totaled $3.9 million

Investments in Unconsolidated Real Estate Ventures On September 26 2011 we contributed $15.4 million to the capital of

limited partnership the HSRE Venture or HSREV in exchange for 50% interest in the partnership HSREV owns

nine storage facilities in Pennsylvania Virginia New York New Jersey and Florida The other partner in HSRE which

holds the remaining 50% interest is unaffiliated with the Company

Entered into Term Loan Facility and the 2011 Credit Facility On June 20 2011 we entered into an unsecured Term Loan

Agreement the Term Loan Facility which consisted of $100 million term loan with five-year maturity and $100

million term loan with seven-year maturity portion of these proceeds were used to repay $100 million term loan that

was part of the prior unsecured credit facility the Prior Facility We incurred costs of $2.1 million in connection with

executing the agreement and capitalized such costs as component of loan procurement costs net of amortization on our

consolidated balance sheet Additionally we wrote off deferred financing fees related to the repayment of portion of the

Prior Facility which totaled $2.1 million On December 2011 we entered into Credit Agreement providing for credit

facility comprised of $100 million unsecured term loan maturing in December 2014 $200 million unsecured term loan

maturing in March 2017 and $300 million unsecured revolving facility maturing in December 2015 the 2011 Credit

Facility The 2011 Credit Facility replaces in its entirety our Prior Facility which was last amended on September 29

2010 and which as of the date of its replacement consisted of $100 million unsecured term loan and $250 million

unsecured revolving credit facility In connection with obtaining the new 2011 Credit Facility we paid additional deferred

financing costs of $3.4 million and wrote off deferred financing fees related to the Prior Facility of $6.1 million

Offering Proceeds During October 2011 we completed public offering of 23 million common shares at public offering

price of $9.20 which reflects the full exercise by the underwriters of their option to purchase million shares to cover over-

allotments We received approximately $202.5 million in net proceeds from the offering after deducting the underwriting

discount and other estimated offering expenses During November 2011 we completed public offering of 3.1 million

Series preferred shares at public offering price of $25.00 per share for gross proceeds of $77.5 million We received

approximately $74.8 million in net proceeds after deducting the underwriting discount and offering expenses We used

proceeds from both these offerings to pay portion of the cash purchase price of the Storage Deluxe Acquisition On

September 16 2011 we further amended our sales agreement with Cantor Fitzgerald Co the Sales Agent dated

April 2009 as amended on January 26 2011 as amended the Sales Agreement to increase the number of common

shares that the Sales Agent may sell under the Sales Agreement from 15 million to 20 million During the year ended

December 31 2011 we sold 140000 shares under the program at an average sales price of $10.75 per share resulting in net

proceeds of$l.5 million We have sold 8.2 million shares with an average sales price of $7.30 per share resulting in net

proceeds of $60.1 million since the inception of the program in 2009

Business Strategy

Our business strategy consists of several elements

Maximize cash flow from our facilities Our operating strategy focuses on maximizing sustainable rents at our facilities

while achieving and sustaining occupancy targets We utilize our operating systems and experienced personnel to manage the

balance between rental rates discounts and physical occupancy with an objective of maximizing our rental revenue

Acquire facilities within targeted markets During 2012 we intend to pursue selective acquisitions in markets that we

believe have high barriers to entry strong demographic fundamentals and demand for storage in excess of storage capacity Webelieve the self-storage industry will continue to afford us opportunities for growth through acquisitions due to the highly

fragmented composition of the industry

Dispose of facilities not in targeted markets During 2012 we intend to continue to reduce exposure in slower growth lower

barrier-to-entry markets We intend to use proceeds from these transactions to fund acquisitions within target markets

Grow our third party management business We intend to pursueadditional third party management opportunities in

markets where we currently maintain management that can be extended to additional facilities We intend to leverage our

current platform to take advantage of consolidation in the industry We plan to utilize our relationships with third party owners

to help source future acquisitions

Investment and Market Selection Process

We maintain disciplined and focused process in the acquisition and development of self-storage facilities Our investment

committee comprised of our named executive officers and led by Dean Jernigan our Chief Executive Officer oversees our

investment process Our investment processinvolves six stages identification initial due diligence economic assessment

investment committee approval and when required Board approval final due diligence and documentation Through our

investment committee we intend to focus on the following criteria

Targeted markets Our targeted markets include areas where we currently maintain management that can be extended to

additional facilities or where we believe that we can acquire significant number of facilities efficiently and within short

period of time We evaluate both the broader market and the immediate area typically five miles around the facility for their

ability to support above-average demographic growth We seek to increase our presence primarily in areas that we expect will

experience growth including areas within Illinois Texas Florida Georgia California and the Northeastern and Middle Atlantic

areas of the United States and to enter new markets should suitable opportunities arise

Quality of facility We focus on self-storage facilities that have good visibility and are located near retail centers which

typically provide high traffic corridors and are generally located near residential communities and commercial customers

Growth potential We target acquisitions that offer growth potential through increased operating efficiencies and in some

cases through additional leasing efforts renovations or expansions In addition to acquiring single facilities we seek to invest in

portfolio acquisitions including those offering significant potential for increased operating efficiency and the ability to spread

our fixed costs across large base of facilities

Segment

We have one reportable segment we own operate develop manage and acquire self-storage facilities

Concentration

Our self-storage facilities are located in major metropolitan areas as well as suburban areas and have numerous tenants per facility

No single tenant represented significant concentration of our 2011 revenues Our facilities in Florida California Texas and Illinois

provided approximately 17% 12% 10% and 7% respectively of our total 2011 revenues Our facilities in Florida California Texas

and Illinois provided approximately 18% 15% 10% and 7% respectively of our total 2010 revenues

Seasonality

We typically experience seasonal fluctuations in occupancy levels at our facilities with the levels generally slightly higher during

the summer months due to increased moving activity

Financing Strategy

Although our organizational documents do not limit the amount of debt that we may incur we maintain capital structure that we

believe is reasonable and prudent and that will enable us to have ample cash flow to cover debt service and make distributions to our

shareholders As of December 31 2011 our debt to total capitalization ratio determined by dividing the carrying value of our total

indebtedness by the sum of the market value of the Parent Companys outstanding common shares and units of the Operating

Partnership held by third parties and the carrying value of our total indebtedness was approximately 36.0% compared to

approximately 38.5% as of December 31 2010 Our ratio of debt to the depreciated cost of our real estate assets as of December 31

2011 was approximately 42.4% compared to approximately 43.1% as of December 31 2010 We expect to finance additional

investments in self-storage facilities through the most attractive available sources of capital at the time of the transaction in manner

consistent with maintaining strong financial position and future financial flexibility These capital sources may include borrowings

under the revolving portion of our 2011 Credit Facility and additional secured or unsecured financings sales of common or preferred

shares of the Parent Company in public offerings or private placements and issuances of common or preferred units in our Operating

Partnership in exchange for contributed properties or cash and formations ofjoint ventures We also may sell facilities that we no

longer view as core assets and reallocate the sales proceeds to fund other acquisitions

Competition

Over the last decade new self-storage facility development has intensified the competition among self-storage operators in manymarket areas in which we operate Self-storage facilities compete based on number of factors including location rental rates

security suitability of the facilitys design to prospective customers needs and the manner in which the facility is operated and

marketed In particular the number of competing self-storage facilities in particular market could have material effect on our

occupancy levels rental rates and on the overall operating performance of our facilities We believe that the primary competition for

potential customers of any of our self-storage facilities comes from other self-storage facilities within three-mile radius of that

facility We believe our facilities are well-positioned within their respective markets and we emphasize customer convenience

security and professionalism

Our key competitors include local and regional operators as well as the other public self-storage REITS including Public StorageSovran Self Storage and Extra Space Storage Inc These companies some of which operate significantly more facilities than we do

and have greater resources than we have and other entities may generally be able to accept more risk than we determine is prudent for

us including risks with respect to the geographic proximity of facility investments and the payment of higher facility acquisition

prices This competition may generally reduce the number of suitable acquisition opportunities available to us increase the price

required to consuminate the acquisition of particular facilities and reduce the demand for self-storage space in areas where our

facilities are located Nevertheless we believe that our experience in operating managing acquiring developing and obtaining

financing for self-storage facilities should enable us to compete effectively

Government Regulation

We are subject to various laws ordinances and regulations including regulations relating to lien sale rights and procedures and

various federal state and local environmental regulations that apply generally to the ownership of real property and the operation of

self-storage facilities

Under various federal state and local laws ordinances and regulations an owner or operator of real property may become liable for

the costs of removal or remediation of hazardous substances released on or in its property These laws often impose liability without

regard to whether the owner or operator knew of or was responsible for the release of such hazardous substances Thepresence

of

hazardous substances or the failure to properly remediate such substances when released may adversely affect the property owners

ability to sell the real estate or to borrow using the real estate as collateral and may cause the property owner to incur substantial

remediation costs In addition to claims for cleanup costs the presence of hazardous substances on property could result in claim

by private party for personal injury or claim by an adjacent property owner or user for property damage We may also become

liable for the costs of removal or remediation of hazardous substances stored at the facilities by customer even though storage of

hazardous substances would be without our knowledge or approval and in violation of the customers storage lease agreement with us

Our practice is to conduct or obtain environmental assessments in connection with the acquisition or development of facilities

Whenever the environmental assessment for one of our facilities indicates that facility is impacted by soil or groundwater

contamination from prior owners/operators or other sources we work with our environmental consultants and where appropriate

state governmental agencies to ensure that the facility is either cleaned up that no cleanup is necessary because the low level of

contamination poses no significant risk to public health or the environment or that the responsibility for cleanup rests with third

party In certain cases the Company has purchased environmental liability insurance coverage to indemnify the Company against

claims for contamination or other adverse environmental conditions that may affectproperty

We are not aware of any environmental cleanup liability that we believe will have material adverse effect on us We cannot

assure you however that these environmental assessments and investigations have revealed or will reveal all potential environmental

liabilities that no prior owner created any material environmental condition not known to us or the independent consultant or that

future events or changes in environmental laws will not result in the imposition of environmental liability on us

We have not received notice from any governmental authority of any material noncompliance claim or liability in connection with

any of our facilities nor have we been notified of claim for personal injury or property damage by private party in connection with

any of our facilities relating to environmental conditions

We are not aware of any environmental condition with respect to any of our facilities that could reasonably be expected to have

material adverse effect on our financial condition or results of operations and we do not expect that the cost of compliance with

environmental regulations will have material adverse effect on our financial condition or results of operations We cannot assure

you however that this will continue to be the case

Insurance

We carry comprehensive liability fire extended coverage and rental loss insurance covering all of the facilities in our portfolio We

carry environmental insurance coverage on certain properties in our portfolio We believe the policy specifications and insured limits

are appropriate and adequate given the relative risk of loss the cost of the coverage and industry practice We do not carry insurance

for losses such as loss from riots war or acts of God and in some cases environmental hazards because such coverage is not

available or is not available at commercially reasonable rates Some of our policies such as those covering losses due to terrorist

activities hurricanes floods and earthquakes are insured subject to limitations involving large deductibles or co-payments and policy

limits that may not be sufficient to cover losses We also carry liability insurance to insure against personal injuries that might be

sustained on our properties and director and officer liability insurance

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Offices

Our principal executive office is located at 460 Swedesford Road Suite 3000 Wayne PA 19087 Our telephone number is

610 293-5700 We believe that our current facilities are adequate for our present and future operations

Employees

As of December 31 2011 we employed 1276 employees of whom 193 were corporate executive and administrative personnel and

1083 were property level personnel We believe that our relations with our employees are good Our employees are not unionized

Available Information

We file registration statements proxy statements our annual report on Form 10-K quarterly reports on Form l0-Q current reports

on Form 8-K and amendments to those reports with the SEC You may obtain copies of these documents by visiting the SECsPublic Reference Room at 100 Street N.E Washington D.C 20549 by calling the SEC at 1-800-SEC-0330 or by accessing the

SECs website at www.sec.gov Our internet website address is www.cubesmart.com You also can obtain on our website free of

charge copy of our annual report on Form 10-K the Operating Partnerships registration statement on Form 10 our quarterly

reports on Form l0-Q our current reports on Form 8-K and any amendments to those reports as soon as reasonably practicable after

we electronically file such reports or amendments with or furnish them to the SEC Our internet website and the information

contained therein or connected thereto are not intended to be incorporated by reference into this Annual Report on Form 10-K

Also available on our website free of charge are copies of our Code of Business Conduct and Ethics our Corporate Governance

Guidelines and the charters for each of the committees of our Board of Trustees the Audit Committee the Corporate Governance

and Nominating Committee and the Compensation Committee Copies of each of these documents are also available in print free of

charge upon request by any shareholder You can obtain copies of these documents by contacting Investor Relations by mail at 460

Swedesford Road Suite 3000 Wayne PA 19087

ITEM 1A RISK FACTORS

Overview

Investors should carefully consider among other factors the risks set forth below These risks are not the only ones that we mayface Additional risks not presently known to us or that we currently consider immaterial may also impair our business operations and

hinder our ability to make expected distributions to our shareholders

Risks Related to our Business and Operations

Adverse macroeconomic and business conditions may significantly and negatively affect our revenues profitability and results of

operations

The United States recently experienced an economic slowdown that has resulted in higher unemployment shrinking demand for

products large-scale business failures and tight credit markets Our results of operations may be sensitive to changes in overall

economic conditions that impact consumer spending including discretionary spending as well as to increased bad debts due to

recessionary pressurescontinuation of or slow

recovery from ongoing adverse economic conditions affecting disposable

consumer income such as employment levels business conditions interest rates tax rates fuel and energy costs and other matters

could reduce consumer spending or cause consumers to shift their spending to other products and services general reduction in the

level of discretionary spending or shifts in consumer discretionary spending could adversely affect our growth and profitability

It is difficult to determine the breadth and duration of the economic and financial market problems and the many ways in which

they may affect our customers and our business in general Nonetheless continuation or further worsening of these difficult financial

and macroeconomic conditions could have significant adverse effect on our sales profitability and results of operations

Many states and local jurisdictions are facing severe budgetary problems which may have an adverse impact on our business and

financial results

Many states and jurisdictions are facing severe budgetary problems Action that may be taken in response to these problems such

as increases in property taxes on commercial properties changes to sales taxes or other governmental efforts including mandating

medical insurance for employees could adversely impact our business and results of operations

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Ourfinancial performance is dependent upon the economic and other conditions of the markets in which our facilities are located

We are susceptible to adverse developments in the markets in which we operate such as business layoffs or downsizing industry

slowdowns relocations of businesses changing demographics and other factors Our facilities in Florida California Texas NewYork Tennessee Illinois and Ohio accounted for approximately 16% 13% 11% 7% 7% 7% and 6% respectively of our total

rentable square feet as of December 31 2011 As result of this geographic concentration of our facilities we are particularly

susceptible to adverse market conditions in these areas Any adverse economic or real estate developments in these markets or in anyof the other markets in which we operate or any decrease in demand for self-storage space resulting from the local business climate

could adversely affect our rental revenues which could impair our ability to satisfy our debt service obligations and pay distributions

to our shareholders

We face risks associated with facility acquisitions

We intend to continue to acquire individual and portfolios of self-storage facilities that would increase our size and may potentially

alter our capital structure Although we believe that the acquisitions that we expect to undertake in the future will enhance our future

financial performance the success of such transactions is subject to number of factors including the risks that

we may not be able to obtain financing for acquisitions on favorable terms

acquisitions may fail to perform as expected

the actual costs of repositioning or redeveloping acquired facilities may be higher than our estimates

acquisitions may be located in new markets where we may have limited knowledge and understanding of the local economyan absence of business relationships in the area or an unfamiliarity with local governmental and permitting procedures

there is only limited recourse or no recourse to the former owners of newly acquired facilities for unknown or undisclosed

liabilities such as the clean-up of undisclosed environmental contamination claims by tenants vendors or otherpersons

arising on account of actions or omissions of the former owners of the facilities ordinary course of business expenses and

claims by local governments adjoining property owners property owner associations and easement holders for fees

assessments taxes on other property-related changes

As result if liability were asserted against us based upon ownership of an acquired facility we might be required to pay

significant sums to settle it which could adversely affect our financial results and cash flow

We will incur costs and will face integration challenges when we acquire additional facilities

As we acquire or develop additional self-storage facilities we will be subject to risks associated with integrating and managing new

facilities including customer retention and mortgage default risks In the case of large portfolio purchase we could experience

strains in our existing management information capacity In addition acquisitions or developments may cause disruptions in our

operations and divert managements attention away from day-to-day operations Furthermore our profitability may suffer because wewill be required to expense acquisition-related costs and amortize in future periods costs for acquired goodwill and other intangible

assets Our failure to successfully integrate any future facilities into our portfolio could have an adverse effect on our operating costs

and our ability to make distributions to our shareholders

The acquisition of new facilities that lack operating history with us will make it more difficult to predict revenue potential

We intend to continue to acquire additional facilities These acquisitions could fail to perform in accordance with expectations If

we fail to accurately estimate occupancy levels rental rates operating costs or costs of improvements to bring an acquired facility up

to the standards established for our intended market position the performance of the facility may be below expectations Acquired

facilities may have characteristics or deficiencies affecting their valuation or revenue potential that we have not yet discovered Wecannot assure you that the performance of facilities acquired by us will increase or be maintained under our management

We depend on external sources of capital that are outside of our control the unavailability of capital from external sources could

adversely affect our ability to acquire or develop facilities satisfy our debt obligations and/or make distributions to shareholders

We depend on external sources of capital to fund acquisitions and facility development to satisfy our debt obligations and to make

the required distributions to our shareholders in order to maintain our status as REIT which may or may not be available on

favorable terms if at all Our access to external sources of capital depends on number of things including the markets perception

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of our growth potential and our current and potential future earnings and our ability to continue to qualify as REIT for federal

income tax purposes If we are unable to obtain external sources of capital we may not be able to acquire or develop facilities when

strategic opportunities exist satisf our debt obligations or make distributions to shareholders that would permit us to qualifi as

REIT or avoid paying tax on our REIT taxable income

Rising operating expenses could reduce our cash flow andfunds available forfuture distributions

Our facilities and any other facilities we acquire or develop in the future are and will be subject to operating risks common to real

estate in general any or all of which may negatively affect us Our facilities are subject to increases in operating expenses such as real

estate and other taxes personnel costs including the cost of providing specific medical coverage to our employees utilities insurance

administrative expenses and costs for repairs and maintenance If operating expensesincrease without corresponding increase in

revenues our profitability could diminish and limit our ability to make distributions to our shareholders

We cannot assure you of our ability to pay dividends in the future

Historically we have paid quarterly distributions to our shareholders and we intend to continue to pay quarterly dividends and to

make distributions to our shareholders in amounts such that all or substantially all of our taxable income in each year subject to

certain adjustments is distributed This along with other factors should enable us to continue to qualify for the tax benefits accorded

to REIT under the Internal Revenue Code We have not established minimum dividends payment level and all future distributions

will be made at the discretion of our Board of Trustees Our ability to pay dividends will depend upon among other factors

the operational and financial performance of our facilities

capital expenditures with respect to existing and newly acquired facilities

general and administrative costs associated with our operation as publicly-held REIT

maintenance of our REIT status

the amount of and the interest rates on our debt

the absence of significant expenditures relating to environmental and other regulatory matters and

other risk factors described in this Annual Report on Form 10-K

Certain of these matters are beyond our control and any significant difference between our expectations and actual results could have

material adverse effect on our cash flow and our ability to make distributions to shareholders

If we are unable to promptly re-let our cubes or if the rates upon such re-letting are significantly lower than expected then our

business and results of operations would be adversely affected

We derive revenues principally from rents received from customers who rent cubes at our self-storage facilities under month-to-

month leases Any delay in re-letting cubes as vacancies arise would reduce our revenues and harm our operating results In addition

lower than expected rental rates upon re-letting could adversely affect our revenues and impede our growth

Property ownership through joint ventures may limit our ability to act exclusively in our interest

We have in the past and may continue to co-invest with third parties through joint ventures In any such joint venture we may not

be in position to exercise sole decision-making authority regarding the facilities owned through joint ventures Investments in joint

ventures may under certain circumstances involve risks not present when third party is not involved including the possibility that

joint venture partners might become bankrupt or fail to fund their share of required capital contributions Joint venture partners may

have business interests or goals that are inconsistent with our business interests or goals and may be in position to take actions

contrary to our policies or objectives Such investments also have the potential risk of impasse on strategic decisions such as sale

in cases where neither we nor the joint venture partner would have full control over the joint venture In other circumstances joint

venture partners may have the ability without our agreement to make certain major decisions including decisions about sales capital

expenditures andlor financing Any disputes that may arise between us and our joint venture partners could result in litigation or

arbitration that could increase our expenses and distract our officers and/or Trustees from focusing their time and effort on our

business In addition we might in certain circumstances be liable for the actions of our joint venture partners and the activities of

joint venture could adversely affect our ability to qualify as REIT even though we do not control the joint venture

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We face risks and significant competition associated with actions taken by our competitors

Actions by our competitors may decrease or prevent increases of the occupancy and rental rates of our properties We compete

with numerous developers owners and operators of self-storage including other REITs some of which own or may in the future own

properties similar to ours in the same submarkets in which our properties are located and some of which may have greater capital

resources In addition due to the relatively low cost of each individual self-storage facility other developers owners and operators

have the capability to build additional facilities that may compete with our facilities

If our competitors build new facilities that compete with our facilities or olferspace at rental rates below current market rates or

below the rental rates we currently charge our tenants we may lose potential tenants and we may be pressured to reduce our rental

rates below those we currently charge in order to retain tenants when our tenants leases expire As result our financial condition

cash flow cash available for distribution market price of our stock and ability to satisfy our debt service obligations could be

materially adversely affected In addition increased competition for customers may require us to make capital improvements to

facilities that we would not have otherwise made Any unbudgeted capital improvements we undertake may reduce cash available for

distributions to our shareholders

We also face significant competition for acquisitions and development opportunities Some of our competitors have greater

financial resources than we do and greater ability to borrow funds to acquire facilities These competitors may also be willing to

accept more risk than we can prudently manage including risks with respect to the geographic proximity of investments and the

payment of higher facility acquisition prices This competition for investments may reduce the number of suitable investment

opportunities available to us may increase acquisition costs and may reduce demand for self-storage spacein certain areas where our

facilities are located and as result adversely affect our operating results

We may become subject to litigation or threatened litigation which may divert managements time and attention require us to pay

damages and expenses or restrict the operation of our business

We may become subject to disputes with commercial parties with whom we maintain relationships or other parties with whom we

do business Any such dispute could result in litigation between us and the other parties Whether or not any dispute actually

proceeds to litigation we may be required to devote significant management time and attention to its successful resolution through

litigation settlement or otherwise which would detract from our managements ability to focus on our business Any such resolution

could involve the payment of damages or expenses by us which may be significant In addition any such resolution could involve

our agreement with terms that restrict the operation of our business

One type of commercial dispute could involve our use of our brand name and other intellectual property for example logos

signage and other marks for which we generally have common law rights but no federal trademark registration There are other

commercial parties at both local and national level that may assert that our use of our brand names and other intellectual property

conflict with their rights to use brand names and other intellectual property that they consider to be similar to ours Any such

commercial dispute and related resolution would involve all of the risks described above including in particular our agreement to

restrict the use of our brand name or other intellectual property

We also could be sued for personal injuries and/or property damage occurring on our properties We maintain liability insurance

with limits that we believe adequate to provide for the defense and/or payment of any damages arising from such lawsuits There can

be no assurance that such coveragewill cover all costs and expenses from such suits

Potential losses may not be covered by insurance which could result in the loss of our investment in facility and the future cash

flows from the facility

We carry comprehensive liability fire extended coverageand rental loss insurance covering all of the facilities in our portfolio We

believe the policy specifications and insured limits are appropriate and adequate given the relative risk of loss the cost of the coverage

and industry practice We do not carry insurance for losses such as loss from riots war or acts of God and in some cases flooding

and environmental hazards because such coverage is not available or is not available at commercially reasonable rates Some of our

policies such as those covering losses due to terrorism hurricanes floods and earthquakes are insured subject to limitations involving

large deductibles or co-payments and policy limits that may not be sufficient to cover losses If we experience loss at facility that

is uninsured or that exceeds policy limits we could lose the capital invested in that facility as well as the anticipated future cash flows

from that facility Inflation changes in building codes and ordinances environmental considerations and other factors also might

make it impractical or undesirable to use insurance proceeds to replace facility after it has been damaged or destroyed In addition

if the damaged facilities are subject to recourse indebtedness we would continue to be liable for the indebtedness even if these

facilities were irreparably damaged

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Our insurance coverage may not comply fully with certain loan requirements

Certain of our properties serve as collateral for our mortgage-backed debt some of which was assumed in connection with our

acquisition of facilities and requires us to maintain insurance at levels and on terms that are not commercially reasonable in the current

insurance environment We may be unable to obtain required insurance coverageif the cost and/or availability make it impractical or

impossible to comply with debt covenants If we cannot comply with lenders requirements in any respect the lender could declare

default that could affect our ability to obtain future financing and could have material adverse effect on our results of operations

and cash flows and our ability to obtain future financing In addition we may be required to self-insure against certain losses or our

insurance costs may increase

Potential liability for environmental contamination could result in substantial costs

We are subject to federal state and local environmental regulations that apply generally to the ownership of real property and the

operation of self-storage facilities If we fail to comply with those laws we could be subject to significant fines or other governmental

sanctions

Under various federal state and local laws ordinances and regulations an owner or operator of real estate may be required to

investigate and clean up hazardous or toxic substances or petroleum product releases at facility and may be held liable to

governmental entity or to third parties for property damage and for investigation and clean up costs incurred by such parties in

connection with contamination Such liability may be imposed whether or not the owner or operator knew of or was responsible for

the presence of these hazardous or toxic substances The cost of investigation remediation or removal of such substances may be

substantial and the presence of such substances or the failure to properly remediate such substances may adversely affect our ability

to sell or rent such facility or to borrow using such facility as collateral In addition in connection with the ownership operation and

management of real properties we arc potentially liable for property damage or injuries to personsand property

Our practice is to conduct or obtain environmental assessments in connection with the acquisition or development of additional

facilities We carry environmental insurance coverage on certain properties in our portfolio We obtain or examine environmental

assessments from qualified and reputable environmental consulting firms and intend to conduct such assessments prior to the

acquisition or development of additional facilities The environmental assessments received to date have not revealed nor do we

have actual knowledge of any environmental liability that we believe will have material adverse effect on us However we cannot

assure you that any environmental assessments performed have identified or will identify all material environmental conditions that

any prior owner of any facility did not create material environmental condition not actually known to us or that material

environmental condition does not otherwise exist with respect to any of our facilities

Americans with Disabilities Act and applicable state accessibility act compliance may require unanticipated expenditures

Under the Americans with Disabilities Act of 1990 and applicable state accessibility act laws collectively the ADA all places

of public accommodation are required to meet federal requirements related to physical access and use by disabled persons number

of other federal state and local laws may also impose access and other similar requirements at our facilities failure to comply with

the ADA or similar state or local requirements could result in the governmental imposition of fines or the award of damages to private

litigants affected by the noncompliance Although we believe that our facilities comply in all material respects with these

requirements or would be eligible for applicable exemptions from material requirements because of adaptive assistance provided

determination that one or more of our facilities is not in compliance with the ADA or similar state or local requirements would result

in the incurrence of additional costs associated with bringing the facilities into compliance If we are required to make substantial

modifications to comply with the ADA or similar state or local requirements we may be required to incur significant unanticipated

expenditures which could have an adverse effect on our operating costs and our ability to make distributions to our shareholders

Privacy concerns could result in regulatory changes that may harm our business

Personal privacy has become significant issue in the jurisdictions in which we operate Many jurisdictions in which we operate

have imposed restrictions and requirements on the use of personal information by those collecting such information Changes to law or

regulations affecting privacy if applicable to our business could impose additional costs and liability on us and could limit our use

and disclosure of such information

We face system security risks as we depend upon automated processes and the Internet

We are increasingly dependent upon automated information technology processes While we attempt to mitigate this risk through

offsite backup procedures and contracted data centers that include in some cases redundant operations we could still be severely

15

impacted by catastrophic occurrence such as natural disaster or terrorist attack In addition an increasing portion of our business

operations are conducted over the Internet increasing the risk of viruses that could cause system failures and disruptions of operations

despite our deployment of anti-virus measures Experienced computer programmers may be able to penetrate our network security

and misappropriate our confidential information create system disruptions or cause shutdowns

Terrorist attacks and other acts of violence or war may adversely impact our performance and may affect the markets on which

our securities are traded

Terrorist attacks against our facilities the United States or our interests may negatively impact our operations and the value of our

securities Attacks or armed conflicts could negatively impact the demand for self-storage facilities and increase the cost of insurance

coverage for our facilities which could reduce our profitability and cash flow Furthermore any terrorist attacks or armed conflicts

could result in increased volatility in or damage to the United States and worldwide financial markets and economy

Risks Related to the Real Estate Industry

Our performance and the value of our self-storage facilities are subject to risks associated with our properties and with the real

estate industry

Our rental revenues and operating costs and the value of our real estate assets and consequently the value of our securities are

subject to the risk that if our facilities do not generate revenues sufficient to meet our operating expenses including debt service and

capital expenditures our cash flow and ability to pay distributions to our shareholders will be adversely affected Events or conditions

beyond our control that may adversely affect our operations or the value of our facilities include but are not limited to

downturns in the national regional and local economic climate

local or regional oversupply increased competition or reduction in demand for self-storage space

vacancies or changes in market rents for self-storage space

inability to collect rent from customers

increased operating costs including maintenance insurance premiums and real estate taxes

changes in interest rates and availability of financing

hurricanes earthquakes and other natural disasters civil disturbances terrorist acts or acts of war that may result in uninsured

or underinsured losses

significant expenditures associated with acquisitions and development projects such as debt service payments real estate

taxes insurance and maintenance costs which are generally not reduced when circumstances cause reduction in revenues

from property

costs of complying with changes in laws and governmental regulations including those governing usage zoning the

environment and taxes and

the relative illiquidity of real estate investments

In addition prolonged periods of economic slowdown or recession rising interest rates or declining demand for self-storage or the

public perception that any of these events may occur could result in general decline in rental revenues which could impair our

ability to satisfy our debt service obligations and to make distributions to our shareholders

Rental revenues are significantly influenced by demand for self-storage space generally and decrease in such demand would

likely have greater adverse efftcl on our rental revenues than ifwe owned more diversified real estate portfolio

Because our portfolio of facilities consists primarily of self-storage facilities we are subject to risks inherent in investments in

single industry decrease in the demand for self-storage spacewould have greater adverse effect on our rental revenues than if we

owned more diversified real estate portfolio Demand for self-storage space has been and could be adversely affected by ongoing

weakness in the national regional and local economies changes in supply of or demand for similaror competing self-storage

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facilities in an area and the excess amount of self-storage spacein particular market To the extent that any of these conditions occur

they are likely to affect market rents for self-storage space which could cause decrease in our rental revenue Any such decrease

could impair our ability to satisfy debt service obligations and make distributions to our shareholders

Because real estate is illiquid we may not be able to sell properties when appropriate

Real estate property investments generally cannot be sold quickly Also the tax laws applicable to REITs require that we hold our

facilities for investment rather than sale in the ordinary course of business which may cause us to forgo or defer sales of facilities that

otherwise would be in our best interest Therefore we may not be able to dispose of facilities promptly or on favorable terms in

response to economic or other market conditions which may adversely affect our financial position

Risks Related to our Qualification and Operation as REIT

Failure to qualify as REIT would subject us to U.S federal income tax which would reduce the cash available for distribution to

our shareholders

We operate our business to qualify to be taxed as REIT for federal income tax purposes We have not requested and do not plan

to request ruling from the IRS that we qualify as REIT and the statements in this Annual Report on Form 10-K are not binding on

the IRS or any court As REIT we generally will not be subject to federal income tax on the income that we distribute currently to

our shareholders Many of the REIT requirements however are highly technical and complex The determination that we are REIT

requires an analysis of various factual matters and circumstances that may not be totally within our control For example to qualify as

REIT at least 95% of our grossincome must come from specific passive sources such as rent that are itemized in the REIT tax

laws In addition to qualify as REIT we cannot own specified amounts of debt and equity securities of some issuers We also are

required to distribute to our shareholders with respect to eachyear at least 90% of our REIT taxable income excluding net capital

gains The fact that we hold substantially all of our assets through the Operating Partnership and its subsidiaries further complicates

the application of the REIT requirements for us Even technical or inadvertent mistake could jeopardize our REIT status and given

the highly complex nature of the rules governing REITs and the ongoing importance of factual determinations we cannot provide any

assurance that we will continue to qualify as REIT Furthermore Congress and the IRS might make changes to the tax laws and

regulations and the courts might issue new rulings that make it more difficult or impossible for us to remain qualified as REIT If

we fail to qualify as REIT for federal income tax purposesand are able to avail ourselves of one or more of the statutory savings

provisions in order to maintain our REIT status we would nevertheless be required to pay penalty taxes of $50000 or more for each

such failure

If we fail to qualify as REIT for federal income tax purposes and are unable to avail ourselves of certain savings provisions set

forth in the Internal Revenue Code we would be subject to federal income tax at regular corporate rates on all of our income As

taxable corporation we would not be allowed to take deduction for distributions to shareholders in computing our taxable income or

pass through long term capital gains to individual shareholders at favorable rates We also could be subject to the federal alternative

minimum tax and possibly increased state and local taxes We would not be able to elect to be taxed as REIT for four years

following the year we first failed to qualify unless the IRS were to grant us relief under certain statutory provisions If we failed to

qualify as REIT we would have to pay significant income taxes which would reduce our net earnings available for investment or

distribution to our shareholders This likely would have significant adverse effect on our earnings and likely would adversely affect

the value of our securities In addition we would no longer be required to pay any distributions to shareholders

Failure of the Operating Partnership or subsidiary partnership to be treated as partnership would have serious adverse

consequences to our shareholders

If the IRS were to successfully challenge the tax status of the Operating Partnership or any of its subsidiary partnerships for federal

income tax purposes the Operating Partnership or the affected subsidiary partnership would be taxable as corporation In such event

we would cease to qualify as REIT and the imposition of corporate tax on the Operating Partnership or subsidiary partnership

would reduce the amount of cash available for distribution from the Operating Partnership to us and ultimately to our shareholders

To maintain our REIT status we may be forced to borrow funds on short term basis during unfavorable market conditions

As REIT we are subject to certain distribution requirements including the requirement to distribute 90% of our REIT taxable

income that may result in our having to make distributions at disadvantageous time or to borrow funds at unfavorable rates

Compliance with this requirement may hinder our ability to operate solely on the basis of maximizing profits

17

We will pay some taxes even ifwe qualify as REIT which will reduce the cash available for distribution to our shareholders

Even if we qualify as REIT for federal income tax purposes we will be required to pay certain federal state and local taxes on our

income and property For example we will be subject to income tax to the extent we distribute less than 100% of our REIT taxable

income including capital gains Additionally we will be subject to 4% nondeductible excise tax on the amount if any by which

dividends paid by us in any calendar year are less than the sum of 85% of our ordinary income 95% of our capital gain net income

and 100% of our undistributed income from prior years Moreover if we have net income from prohibited transactions that income

will be subject to 100% penalty tax In general prohibited transactions are sales or other dispositions of property held primarily for

sale to customers in the ordinary course of business The determination as to whether particular sale is prohibited transaction

depends on the facts and circumstances related to that sale We cannot guarantee that sales of our properties would not be prohibited

transactions unless we comply with certain statutory safe-harbor provisions

In addition any net taxable income earned directly by our taxable REIT subsidiaries or through entities that are disregarded for

federal income tax purposes as entities separate from our taxable REIT subsidiaries will be subject to federal and possibly state

corporate income tax We have elected to treat some of our subsidiaries as taxable REIT subsidiaries and we may elect to treat other

subsidiaries as taxable REIT subsidiaries in the future In this regard several provisions of the laws applicable to REITs and their

subsidiaries ensure that taxable REIT subsidiary will be subject to an appropriate level of federal income taxation For example

taxable REIT subsidiary is limited in its ability to deduct certain interest payments made to an affiliated REIT In addition the REIT

has to pay 100% penalty tax on some payments that it receives or on some deductions taken by taxable REIT subsidiary if the

economic arrangements between the REIT the REITs customers-and the taxable REIT subsidiary are not comparable to similar

arrangements between unrelated parties Finally some state and local jurisdictions may tax some of our income even though as

REIT we are not subject to federal income tax on that income because not all states and localities follow the federal income tax

treatment of REITs To the extent that we and our affiliates are required to pay federal state and local taxes we will have less cash

available for distributions to our shareholders

We face possible federal state and local tax audits

Because we are organized and qualify as REIT we are generally not subject to federal income taxes but are subject to certain

state and local taxes Certain entities through which we own real estate either have undergone or are currently undergoing tax audits

Although we believe that we have substantial arguments in favor of our positions in the ongoing audits in some instances there is no

controlling precedent or interpretive guidance on the specific point at issue Collectively tax deficiency notices received to date from

the jurisdictions conducting the ongoing audits have not been material However there can be no assurance that future audits will not

occur with increased frequency or that the ultimate result of such audits will not have material adverse effect on our results of

operations

Risks Related to our Debt Financings

We face risks related to current debt maturities including refinancing risk

Certain of our mortgages bank loans and unsecured debt will have significant outstanding balances on their maturity dates

commonly known as balloon payments We may not have the cash resources available to repay those amounts and we may have to

raise funds for such repayment either through the issuance of capital stock additional borrowings which may include extension of

maturity dates joint ventures or asset sales There can be no assurance that we will be able to refinance the debt on favorable terms

or at all To the extent we cannot refinance debt on favorable terms or at all we may be forced to dispose of properties on

disadvantageous terms or pay higher interest rates either of which would have an adverse impact on our financial performance and

ability to pay dividends to investors

As result of our interest rate hedges swap agreements and other similar arrangements we face counterparty risks

We may be exposed to the potential risk of counterparty default or non-payment with respect to interest rate hedges swap

agreements floors capsand other interest rate hedging contracts that we may enter into from time to time in which event we could

suffer material loss on the value of those agreements Although these agreements may lessen the impact of rising interest rates on

us they also expose us to the risk that other parties to the agreements will not perform or that we cannot enforce the agreements

There is no assurance that our potential counterparties on these agreements are likely to perform their obligations under such

agreements

18

Financing our future growth plan or refinancing existing debt maturities could be impacted by negative capital market conditions

Recently domestic financial markets have experienced extreme volatility and uncertainty Overall liquidity has tightened in the

domestic financial markets including the investment grade debt and equity capital markets for which we historically sought financing

Consequently there is greater uncertainty regarding our ability to access the credit markets in order to attract financing on reasonable

terms nor can there be any assurance we can issue common or preferred equity securities at reasonable price Our ability to finance

new acquisitions and refinance future debt maturities could be adversely impacted by our inability to secure permanent financing on

reasonable terms if at all

The terms and covenants relating to our indebtedness could adversely impact our economic performance

Like other real estate companies that incur debt we are subject to risks associated with debt financing such as the insufficiency of

cash flow to meet required debt service payment obligations and the inability to refinance existing indebtedness If our debt cannot be

paid refinanced or extended at maturity we may not be able to make distributions to shareholders at expected levels or at all and maynot be able to acquire new properties Failure to make distributions to our shareholders could result in our failure to qualify as REIT

for federal income tax purposes Furthermore an increase in our interest expense could adversely affect our cash flow and ability to

make distributions to shareholders If we do not meet our debt service obligations any facilities securing such indebtedness could be

foreclosed on which would have material adverse effect on our cash flow and ability to make distributions and depending on the

number of facilities foreclosed on could threaten our continued viability

Our 2011 Credit Facility contains and any new or amended facility we may enter into from time to time will likely contain

customary affirmative and negative covenants including financial covenants that among other things require us to comply with

certain liquidity and net worth tests Our ability to borrow under the 2011 Credit Facility is and any new or amended facility we mayenter into from time to time will be subject to compliance with such financial and other covenants In the event that we fail to satisfy

these covenants we would be in default under the 2011 Credit Facility and may be required to repay such debt with capital from other

sources Under such circumstances other sources of debt or equity capital may not be available to us or may be available only on

unattractive terms Moreover the presence of such covenants in our credit agreements could cause us to operate our business with

view toward compliance with such covenants which might not produce optimal returns for shareholders

Increases in interest rates on variable rate indebtedness would increase our interest expense which could adversely affect our cash

flow and ability to make distributions to shareholders Rising interest rates could also restrict our ability to refinance existing debt

when it matures In addition an increase in interest rates could decrease the amounts that third parties are willing to pay for our

assets thereby limiting our ability to alter our portfolio promptly in relation to economic or other conditions

Our organizational documents contain no limitation on the amount of debt we may incur As result we may become highly

leveraged in the future

Our organizational documents contain no limitations on the amount of indebtedness that we or our Operating Partnership may incur

We could alter the balance between our total outstanding indebtedness and the value of our assets at any time If we become more

highly leveraged then the resulting increase in debt service could adversely affect our ability to make payments on our outstanding

indebtedness and to pay our anticipated distributions and/or the distributions required to maintain our REIT status and could harm our

financial condition

Risks Related to our Organization and Structure

We are dependent upon our senior management team whose continued service is not guaranteed

Our executive team including our named executive officers have extensive self-storage real estate and public company experience

Although we have employment agreements with these members of our senior management team we cannot provide any assurance

that any of them will remain in our employment The loss of services of one or more members of our senior management team could

adversely affect our operations and our future growth

We are dependent upon our on-site personnel to maximize customer satisfaction any difficulties we encounter in hiring training

and retaining skilled field personnel may adversely affect our rental revenues

As of December 31 2011 we had 1083 field personnel involved in the management and operation of our facilities The customer

service marketing skills and knowledge of local market demand and competitive dynamics of our facility managers are contributing

factors to our ability to maximize our rental income and to achieve the highest sustainable rent levels at each of our facilities We

compete with various other companies in attracting and retaining qualified and skilled personnel Competitive pressures may require

19

that we enhance our pay and benefits package to compete effectively for such personnel If there is an increase in these costs or if wefail to attract and retain qualified and skilled personnel our business and operating results could be harmed

Certain provisions of Maryland law could inhibit changes in control which may discourage third parties from conducting tender

offer or seeking other change of control transactions that could involve premiumprice for our shares or otherwise benefit our

shareholders

Certain provisions of Maryland law may have the effect of inhibiting third party from making proposal to acquire us or of

impeding change of control under circumstances that otherwise could provide the holders of our common shares with the

opportunity to realize premium over the then-prevailing market price of those shares including

business combination moratoriumlfair price provisions that subject to limitations prohibit certain business combinations

between us and an interested shareholder defined generally as any person who beneficially owns 10% or more of the voting

power of our shares or an affiliate thereof for five years after the most recent date on which the shareholder becomes an

interested shareholder and thereafter imposes stringent fair price and super-majority shareholder voting requirements on these

combinations and

control share provisions that provide that control shares of our company defined as shares which when aggregated with

other shares controlled by the shareholder entitle the shareholder to exercise one of three increasing rangesof voting power in

electing Trustees acquired in control share acquisition defined as the direct or indirect acquisition of ownership or control

of control shares from party other than the issuer have no voting rights except to the extent approved by our shareholders by

the affirmative vote of at least two thirds of all the votes entitled to be cast on the matter excluding all interested shares and are

subject to redemption in certain circumstances

We have opted out of these provisions of Maryland law However our Board of Trustees may opt to make these provisions

applicable to us at any time without shareholder approval

Our Trustees also have the discretion granted in our bylaws and Maryland law without shareholder approval to among other things

create staggered Board of Trustees and amend our bylaws or repeal individual bylaws in manner that provides the Board of

Trustees with greater authority Any such action could inhibit or impede third party from making proposal to acquire us at price

that could be beneficial to our shareholders

Our shareholders have limited control to prevent us from making any changes to our investment and financing policies

Our Board of Trustees has adopted policies with respect to certain activities These policies may be amended or revised from time

to time at the discretion of our Board of Trustees without vote of our shareholders This means that our shareholders have limited

control over changes in our policies Such changes in our policies intended to improve expand or diversify our business may not have

the anticipated effects and consequently may adversely affect our business and prospects results of operations and share price

Our rights and the rights of our shareholders to take action against our Trustees and officers are limited

Maryland law provides that trustee or officer has no liability in that capacity if he or she performs his or her duties in good faith

in manner he or she reasonably believes to be in our best interests and with the care that an ordinarily prudent personin like

position would use under similar circumstances Our declaration of trust and bylaws require us to indemnify our Trustees and officers

for actions taken on behalf of the Company by them in those capacities to the extent permitted by Maryland law Accordingly in the

event that actions taken in good faith by any Trustee or officer impede our performance our shareholders ability to recover damages

from that Trustee or officer will be limited

Our declaration of trust penn its our Board of Trustees to issue preferred shares with terms that may discourage third parties from

conducting tender offer or seeking other change of control transactions that could involve premiumprice for our shares or

otherwise benefit our shareholders

Our declaration of trust permits our Board of Trustees to issue up to 40000000 preferred shares of which 3100000 shares have

already been issued having those preferences conversion or other rights voting powers restrictions limitations as to distributions

qualifications or terms or conditions of redemption as determined by our Board In addition our Board may reclassify any unissued

common shares into one or more classes or series of preferred shares Thus our Board could authorize without shareholder approval

the issuance of preferred shares with terms and conditions that could have the effect of discouraging takeover or other transaction in

which holders of some or majority of our shares might receive premium for their shares over the then-prevailing market price of

our shares We currently do not expect that the Board would require shareholder approval prior to such preferred issuance In

20

addition any preferred shares that we issue would rank senior to our common shares with respect to the payment of distributions in

which case we could not pay any distributions on our common shares until full distributions have been paid with respect to such

preferred shares

Risks Related to our Securities

Additional issuances of equity securities may be dilutive to shareholders

The interests of our shareholders could be diluted if we issue additional equity securities to finance future acquisitions or

developments or torepay

indebtedness Our Board of Trustees may authorize the issuance of additional equity securities including

preferred shares without shareholder approval Our ability to execute our business strategy depends upon our access to an appropriate

blend of debt financing including unsecured lines of credit and other forms of secured and unsecured debt and equity financing

including the issuance of common and preferred equity

Many factors could have an adverse effrct on the market value of our securities

number of factors might adversely affect the price of our securities many of which are beyond our control These factors include

increases in market interest rates relative to the dividend yield on our shares If market interest rates go up prospective

purchasers of our securities may require higher yield Higher market interest rates would not however result in more

funds for us to distribute and to the contrary would likely increase our borrowing costs and potentially decrease funds

available for distribution Thus higher market interest rates could cause the market price of our equity securities to go down

anticipated benefit of an investment in our securities as compared to investment in securities of companies in other industries

including benefits associated with tax treatment of dividends and distributions

perception by market professionals of REITs generally and REITs comparable to us in particular

level of institutional investor interest in our securities

relatively low trading volumes in securities of REITs

our results of operations and financial condition

investor confidence in the stock market generally and

additions and departures of key personnel

The market value of our equity securities is based primarily upon the markets perception of our growth potential and our current

and potential future earnings and cash distributions Consequently our equity securities may trade at prices that are higher or lower

than our net asset value per equity security If our future earnings or cash distributions are less than expected it is likely that the

market price of our equity securities will diminish

The market price of our common shares has been and may continue to be particularly volatile and our shareholders may be

unable to resell their shares at profit

The market price of our common shares has been subject to significant fluctuations and may continue to fluctuate or decline

Between 2009 and December 31 2011 our common stock has been particularly volatile as the price of our common stock has ranged

from high of $11.39 to low of$ 1.50 In the past several years REIT stocks have experienced high levels of volatility and

significant declines in value from their historic highs Additionally as result of the current global credit crisis and the concurrent

economic downturn in the U.S and globally there have been significant declines in the values of equity securities generally in the

U.S and abroad

In the past following periods of volatility in the market price of companys securities securities class action litigation has

often been brought against that company If our stock price is volatile we may become the target of securities litigation Securities

litigation could result in substantial costs and divert our managements attention and resources from our business

21

ITEM lB UNRESOL VED STAFF COMMENTS

None

ITEM PROPERTIES

Overview

As of December 31 2011 we owned 370 self-storage facilities located in 26 states and the District of Columbia and aggregating

approximately 24.4 million rentable squarefeet The following table sets forth certain summary information regarding our facilities

by state as of December 31 2011

State

Number of

Facilities

Number of

Units

Total

Rentable

Square Feet

of Total

Rentable

Square Feet Occupancy

Florida

Texas

California

Illinois

New York

Arizona

Tennessee

Ohio

Connecticut

New Jersey

New Mexico

Georgia

Colorado

Virginia

North Carolina

Maryland

Massachusetts

Utah

Louisiana

Michigan

Pennsylvania

Nevada

Washington DCWisconsin

Indiana

Mississippi

Alabama

Total/Weighted Average

53 37244 393845645 21952 2772168

44 27261 320211727 13843 160771827 25929 1744197

24 11939 128403824 12794 1684629

23 11854 142053318 7945 925026

16 10360 10396103385 387590

6026 759585

4070 492998

5271 528117

3856 462948

4158 518252

2383 206519

2226 239723

1411 195017

1499 220589

2151 225620

886 97182

1798 146101

485 58500

710 73014511 61251

___________793 128871

370 222740 24420369

16.1% 75.7%

11.4% 79.9%

13.1% 75.2%

6.6% 83.6%

7.1% 79.3%

5.3% 79.0%

6.9% 78.1%

5.8% 78.8%

3.8% 82.0%

4.3% 75.2%

1.6% 81.9%

3.1% 77.8%

2.0% 81.5%

2.2% 80.8%

1.9% 79.2%

2.1% 81.0%

0.8% 77.1%

1.0% 76.9%

0.8% 79.0%

0.9% 74.0%

0.9% 81.5%

0.4% 79.3%

0.6% 87.9%

0.2% 76.3%

0.3% 82.3%

0.3% 75.2%

0.5% 73.4%

100.0% 78.4%

22

Our Facilities

The following table sets forth certain additional information with respect to each of our facilities as of December 31 2011 Our

ownership of each facility consists of fee interest in the facility held by our Operating Partnership or one of its subsidiaries except

for five of our facilities which are subject to ground leases In addition small parcels of land at four of our other facilities are subject

to ground leases

Year Acquired/ Year Rentable Manager Climate

Facility Location Developed Built Square Feet Occupancy Units Apartment Controlled

Mobile ALt 1997 1974/90 128871 73.4% 793 1.2%

Chandler AZ 2005 1985 47545 70.7% 434 6.9%

Glendale AZ 1998 1987 56850 81.9% 518 0.0%

GreenValleyAZ 2005 1985 25050 61.6% 255 8.0%

MesalAZ 2006 1985 52375 82.8% 482 0.0%

Mesa II AZ 2006 1981 45445 83.3% 386 9.3%

Mesa III AZ 2006 1986 58189 63.7% 490 4.5%

Phoenix AZ 2006 1987 100387 86.3% 747 9.0%

Phoenix II AZ 2006 1974 83340 69.7% 825 2.6%

Scottsdale AZ 1998 1995 80425 76.2% 658 9.6%

TempeAZ 2005 1975 53890 75.2% 403 13.0%

TucsonlAZ 1998 1974 59350 83.6% 482 0.0%

Tucson II AZ 1998 1988 43950 82.2% 530 100.0%

TucsonlllAZ 2005 1979 49832 79.3% 482 0.0%

TucsonlVAZ 2005 1982 48040 80.0% 481 3.7%

Tucson VAZ 2005 1982 45184 69.8% 417 3.0%

Tucson VI AZ 2005 1982 40766 81.5% 410 3.4%

Tucson VII AZ 2005 1982 52688 90.8% 591 2.0%

Tucson VIII AZ 2005 1979 46600 85.1% 440 0.0%

TucsonlXAZ 2005 1984 67720 76.7% 600 1.9%

Tucson AZ 2005 1981 46350 85.0% 411 0.0%

TucsonXlAZ 2005 1974 42850 86.7% 409 0.0%

TucsonXllAZ 2005 1974 42325 79.8% 434 4.8%

Tucson XIII AZ 2005 1974 45792 77.6% 508 0.0%

Tucson XIV AZ 2005 1976 49095 83.2% 546 8.8%

Apple ValleyICA 1997 1984 73440 71.2% 486 0.0%

Apple Valley II CA 1997 1988 61555 73.7% 445 5.3%

Benicia CA 2005 1988/93/05 74770 86.9% 739 0.0%

Cathedral City CA 2006 1982/92 109239 67.3% 660 2.3%

Citrus Heights CA 2005 1987 75620 75.3% 664 0.0%

Diamond Bar CA 2005 1988 103034 80.4% 898 0.0%

Escondido CA 2007 2002 142870 83.1% 1228 6.5%

FallbrookCA 1997 1985/88 46620 81.5% 446 0.0%

Lancaster CA 2001 1987 60675 71.1% 328 0.0%

Long Beach CA 2006 1974 125091 63.3% 1350 0.0%

Murrieta CA 2005 1996 49835 88.1% 421 2.9%

NorthHighlandsCA 2005 1980 57244 77.1% 467 0.0%

Orangevale CA 2005 1980 50317 79.1% 529 0.0%

Palm Springs CA 2006 1989 72675 70.6% 548 0.0%

PalmSpringsIICA 2006 1982/89 122250 63.2% 588 8.5%

Pleasanton CA 2005 2003 85045 88.6% 691 0.0%

Rancho Cordova CA 2005 1979 53978 79.1% 459 0.0%

RialtolCA 1997 1987 57411 74.8% 453 0.0%

Rialto II CA 2006 1980 99803 78.9% 717 0.0%

RiversidelCA 2006 1977 67120 82.1% 629 0.0%

Riverside II CA 2006 1985 85166 61.0% 815 3.9%

Roseville CA 2005 1979 59869 80.3% 546 0.0%

Sacramento CA 2005 1979 50664 77.7% 543 0.0%

Sacramento II CA 2005 1986 61888 67.4% 550 0.0%

San Bernardino CA 1997 1987 31070 77.5% 231 0.0%

23

Year Acquired/ Year Rentable Manager Climate

Facility Location Developed Built Square Feet Occupancy Units Apartment Controlled

San Bernardino II CA 1997 1991 41546 74.4% 375 0.0%

San Bernardino III CA 1997 1985/92 35446 74.9% 382 0.0%

San Bernardino IV CA 2005 2002/04 83307 1.4% 705 11.6%

San Bernardino CA 2006 1974 56795 60.9% 483 4.2%

San Bernardino VI CA 2006 1975 103530 60.3% 876 0.0%

San Bernardino VII CA 2006 1978 78729 86.4% 607 1.3%

San Bernardino VIII CA 2006 1977 94529 66.5% 838 0.0%

San Marcos CA 2005 1979 37430 85.9% 242 0.0%

Santa AnaCA 2006 1984 64071 76.1% 714 2.3%

South Sacramento CA 2005 1979 52165 72.1% 415 0.0%

Spring Valley CA 2006 1980 55045 79.8% 713 0.0%

Temecula CA 1998 1985/2003 81550 76.2% 691 46.5%

TemeculallCA 2006 2003 84398 78.9% 630 51.3%

Thousand Palms CA 2006 1988/0 75345 68.9% 699 26.9%

Vista CA 2001 1988 74405 85.6% 618 0.0%

Vista II CA 2005 200 1/02/03 147981 78.7% 1270 2.3%

Walnut CA 2005 1987 50708 83.3% 536 9.2%

West Sacramento CA 2005 1984 39790 77.6% 478 0.0%

Westminster CA 2005 1983/98 68098 80.4% 558 0.0%

Aurora CO 2005 1981 75827 79.9% 598 0.0%

Colorado Springs CO 2005 1986 47975 78.1% 461 0.0%

Colorado Springs II CO 2006 2001 62300 86.8% 430 0.0%

Denver CO 2006 1997 59200 78.0% 449 0.0%

Federal Heights CO 2005 1980 54770 84.2% 558 0.0%

Golden CO 2005 1985 87334 80.3% 635 1.2%

LittletonCO 2005 1987 53490 86.3% 442 37.4%

Northglenn CO 2005 1980 52102 79.0% 497 0.0%

Bloomfield CT 1997 1987/93/94 48700 84.7% 438 6.6%

Branford CT 1995 1986 50679 82.5% 432 2.2%

Bristol CT 2005 1989/99 47400 82.1% 446 22.5%

East Windsor CT 2005 1986/89 45700 77.1% 297 0.0%

Enfield CT 2001 1989 52875 88.9% 363 0.0%

Gales Ferry CT 1995 1987/89 54230 77.8% 597 6.5%

Manchester CT 2002 1999/00/01 47125 74.9% 459 37.6%

ManchesterllCT 2005 1984 52725 74.3% 394 0.0%

Milford CT 1994 1975 44885 87.3% 376 4.0%

Monroe CT 2005 1996/03 58500 80.4% 398 0.0%

Mystic CT 1994 1975/86 50725 82.4% 560 2.3%

Newington CT 2005 1978/97 42420 87.0% 246 0.0%

Newington II CT 2005 1979/81 36140 92.2% 196 0.0%

Old Saybrook CT 2005 1982/88/00 86950 84.9% 715 5.9%

Old Saybrook II CT 2005 1988/02 26425 82.9% 254 54.2%

SheltonCT 2011 2007 78465 79.3% 857 85.7%

South Windsor CT 1994 1976 72125 78.0% 555 1.1%

Stamford CT 2005 1997 28957 86.9% 362 32.8%

Washington DC 2008 2002 63085 87.9% 752 96.5%

WashingtonllDC 2011 1929/98 83016 87.8% 1046 99.0%

BocaRatonFL 2001 1998 37958 84.0% 605 68.2%

Boynton Beach FL 2001 1999 61967 81.5% 754 54.2%

Boynton Beach II FL 2005 2001 61727 70.7% 578 82.3%

BradentonlFL 2004 1979 68391 71.0% 622 2.7%

Bradenton II FL 2004 1996 87855 75.7% 846 40.1%

Cape Coral FL 2000 2000 76627 75.4% 863 83.6%

DaniaFL 1994 1988 58270 81.9% 494 26.9%

DaniaBeachFL6 2004 1984 172568 65.6% 1879 21.3%

DavieFL 2001 2001 81135 84.8% 833 55.6%

Deerfield Beach FL 1998 1998 57280 88.3% 518 38.8%

24

Facility Location

Delray Beach FL

Fernandina Beach FL

Ft Lauderdale FL

Ft Myers FL

Jacksonville FL

Jacksonville II FL

Jacksonville III FL

Jacksonville IV FL

Jacksonville FL

Kendall FL

Lake Worth FL

Lakeland FL

Lutz FL

Lutz II FL

Margate FL

Margate II FL

Merrit Island FL

Miami FL

Miami II FL

Miami III FL

Miami IV FL

Naples FL

Naples II FL

Naples III FL

Naples IV FL

Ocoee FL

Orange City FL

Orlando FL

Orlando II FL

Orlando III FL

Orlando IV FL

Oviedo FL

Pembroke Pines FL

Royal Palm Beach FL t.

Royal Palm Beach II FL

Sanford FL

Sarasota FL

St Augustine FL

Stuart FL

SW Ranches FL

Tampa FL

West Palm Beach FL

West Palm Beach II FL

Alpharetta GAAustell GADecatur GADuluth GALawrenceville GANorcross GANorcross II GAPeachtree City GASmyrna GASnellville GASuwanee GASuwanee II GAAddison IL

Aurora IL

Manager Climate

Units Apartment Controlled

822 39.3%

805 35.3%

692 46.8%

592 67.2%

710 100.0%

652 100.0%

682 100.0%

704 100.0%

673 82.4%

703 71.0%

1356 37.2%

491 79.4%

612 37.0/o

531 20.6/o

337 9.9%

424 28.8%

465 56.7%

560 52.1%

568 8.0%

1517 86.9%

935 100.0/c

325 26.6/c

629 44.6/c

807 23.7/c

429 42.7/c

630 15.5/

648 39.1/c

497 4.9%

579 74.2%

788 6.9%

644 64.4%

425 3.2%

696 63.2%

675 54.5%

762 82.3%

437 28.6%

524 42.5%

698 29.9%

975 5l.5%

647 85.3%

792 28.4%

980 47.2%

834 73.9%

670 75.1%

641 66.5%

1261 2.7%

600 100.0%

610 8.6%

583 55.8%

395 57.0%

435 75.6%

489 100.0%

756 27.1%

619 28.7%

572 61.8%

367 0.0%

556 69%

Year Acquired Year Rentable

Developed Built Square Feet Occupancy

2001 1999 67813 73.9%

1996 1986 110995 75.5%

1999 1999 70063 86.3%

1998 1998 67558 65.3%

2005 2005 80326 90.7%

2007 2004 65270 87.2%

2007 2003 65575 88.5%

2007 2006 77525 81.1%

2007 2004 82435 83.4%

2007 2003 75395 76.5%

1998 1998/02 161808 81.7%

1994 1988 49095 81.8%

2004 2000 66895 72.0%

2004 1999 69232 77.7%

1994 1979/81 54185 82.6%

1996 1985 65186 80.5%

2000 2000 50417 81.4%

1995 1995 46825 90.5%

1994 1989 67060 73.6%

2005 1988/03 150590 71.7%

2011 2007 76352 80.5%

1996 1996 48150 91.8%

1997 1985 65850 82.4%

1997 1981/83 80218 77.3%

1998 1990 40600 71.2%

2005 1997 76100 66.6%

2004 2001 59586 80.3%

1997 1987 52170 59.1%

2005 2002/04 63084 83.0%

2006 1988/90/96 104140 67.6%

2010 2009 76565 71.8%

2006 1988/1991 49251 75.0%

1997 1997 67321 87.1%

1994 1988 98961 60.9%

2007 2004 81405 70.3%

2006 1988/2006 61810 77.2%

1998 1998 71102 66.6%

1996 1985 59725 71.9%

1997 1995 86913 71.9%

2007 2004 64955 83.6%

2007 2001/2002 83638 76.6%

2001 1997 68031 81.8%

2004 1996 94503 86.7%

2001 1996 90485 81.1%

2006 2000 83625 81.6%

1998 1986 148480 69.5%

2011 2009 71235 46.9%

2011 1999 74065 65.4%

2001 1997 85420 77.9%

2011 1996 52020 98.1%

2001 1997 49875 82.8%

2001 2000 56820 90.3%

2007 1996/1997 80000 84.6%

2007 2000/2003 85240 72.1%

2007 2005 79640 72.5%

2004 1979 31325 80.9%

2004 1996 74435 83.1%

25

Year Acquired Year Rentable Manager Climate

Facility Location Developed Built Square Feet Occupancy Units Apartment Controlled

Bartlett IL 2004 1987 51425 88.3% 409 33.5%

Beliwood IL 2001 1999 86650 78.7% 739 52.1%

Des Plaines IL 2004 1978 74400 82.4% 635 0.0%

Elk Grove Village IL 2004 1987 64129 86.7% 626 5.5%

GlenviewIL 2004 1998 100115 93.5% 738 100.0%

Gurnee IL 2004 1987 80300 87.3% 723 34.1%

Hanover IL 2004 1987 41178 81.4% 408 0.4%

Harvey IL 2004 1987 60090 86.1% 575 3.0%

Joliet IL 2004 1993 72765 76.0% 531 1000%

Kildeer IL 2004 1988 46285 90.0% 423 0.0%

Lombard IL 2004 1981 58188 88.1% 548 9.8%

Mount Prospect IL 2004 1979 65000 89.5% 588 12.7%

Mundelein IL 2004 1990 44700 88.9% 490 8.9%

NorthChicagoIL 2004 1985 53350 82.5% 428 0.0%

Plainfield IL 2004 1998 53800 87.7% 402 3.3%

Plainfield II IL 2005 2000 51900 78.1% 355 22.8%

SchaumburgIL 2004 1988 31160 85.9% 321 5.6%

Streamwood IL 2004 1982 64305 70.3% 557 4.4%

WarrensvilleIL 2005 1977/89 48796 87.2% 378 0.0%

WaukeganIL 2004 1977 79500 78.5% 681 8.4%

WestChicagoIL 2004 1979 48175 87.5% 428 0.0%

Westmont IL 2004 1979 53450 86.4% 382 0.0%

Wheeling IL 2004 1974 54210 82.3% 491 0.0%

Wheeling II IL 2004 1979 67825 76.9% 601 7.3%

Woodridge IL 2004 1987 50262 75.8% 463 6.7%

Indianapolis IN 2004 1976 73014 82.3% 710 0.0%

Baton Rouge LA 1997 1980 35200 81.7% 330 11.6%

Baton Rouge II LA 1997 1980/1995 80277 77.6% 558 40.4%

Slidell LA 2001 1998 79540 79.1% 523 46.6%

Boston MA 2010 1950 33286 70.1% 592 100.0%

Boston II MA 2002 2001 60595 78.8% 629 100.0%

Leominster MA 1998 1987/88/00 53823 78.1% 503 38.5%

Medford MA 2007 2001 58815 78.5% 659 96.0%

Baltimore MD 2001 1999/00 93350 1.6% 809 45.3%

California MD 2004 1998 77865 83.3% 722 39.0%

District Heights MD 2011 2007 78920 73.0% 955 64.8%

Gaithersburg MD 2005 1998 87045 84.1% 784 42.0%

Laurel MD 2001 1978/99/00 162792 76.5% 1019 41.1%

TempleHillsMD 2001 2000 97200 83.5% 824 68.2%

Grand Rapids MI 1996 1976 87381 75.0% 525 0.0%

Romulus MI 1997 1997 42050 69.6% 339 7.4%

Wyoming MI 1996 1987 91158 75.1% 635 0.0%

GulfportMS 1997 1977/93 61251 75.2% 511 33.5%

Belmont NC 2001 1996/97/98 81448 80.9% 581 24.0%

Burlington NC 2001 1990/91/93/94/98 109396 65.9% 948 4.7%

Burlington II NC 2001 1991 42305 68.9% 394 12.0%

CaryNC 2001 1993/94/97 112124 87.8% 793 7.4%

Charlotte NC 1999 1999 69000 83.0% 734 52.8%

Raleigh NC 1998 1994/95 48675 89.7% 406 8.2%

BrickNJ 1994 1981 51725 77.1% 432 0.0%

CherryHillNJ 2010 2004 52600 56.6% 376 0.0%

Clifton NJ 2005 2001 105550 82.3% 1018 85.5%

CranfordNJ 1994 1987 91250 79.0% 853 7.9%

East Hanover NJ 1994 1983 107579 70.8% 966 1.6%

EggHarborlNJ 1994 1983 39425 69.7% 289 11.5%

EggHarborllNJ 1994 1983 71175 46.2% 706 16.4%

Elizabeth NJ 2005 1925/97 38830 80.6% 673 0.0%

26

Year Acquired Year Rentable Manager Climate

Facility Location Developed Built Square Feet Occupancy Units Apartment Controlled

Fairview NJ 1997 1989 27925 79.5% 449 100.0%

Hamilton NJ 2006 1990 70550 76.8% 612 0.0%

Hoboken NJ 2005 1945/97 34180 84.3% 742 100.0%

Linden NJ 1994 1983 100425 77.6% 1118 2.8%

Morris Township NJ 1997 1972 71776 77.8% 565 1.3%

Parsippany NJ 1997 1981 66325 83.5% 566 6.9%

Randolph NJ 2002 1998/99 52465 76.4% 541 82.5%

SewellNJ 2001 1984/98 57830 87.3% 454 5.3%

Albuquerque NM 2005 1985 65927 81.6% 610 3.2%

Albuquerque II NM 2005 1985 58598 82.4% 515 4.1%

Albuquerque III NM 2005 1986 57536 79.1% 489 4.7%

Carlsbad NM 2005 1975 39999 88.1% 334 0.0%

DemingNM 2005 1973/83 33005 89.9% 232 0.0%

LasCrucesNM 2005 1984 65790 73.0% 527 2.1%

LovingtonNM 2005 1975 15750 886% 251 0.0%

Silver City NM 2005 1972 26975 86.3% 253 0.0%

Truth or

Consequences NM 2005 1977/99/00 24010 81.9% 174 0.0%

Las Vegas NV 2006 1986 48332 75.4% 370 5.3%

Las Vegas II NV 2006 1997 48850 83.1% 516 75.2%

Jamaica NY 2001 2000 88415 79.7% 919 30.7%

Jamaica II NY 2011 2010 91300 76.5% 1472 84.4%

BronxlNY 2010 1931/2004 69015 74.6% 1325 96.5%

BronxllNY5 2011 2006 90320 90.7% 831 58.4%

BronxIIINY 2011 2007 106065 83.0% 2040 97.3%

BronxlVNY5 2011 2007 73845 80.8% 1313 96.6%

Bronx VNY5 2011 2007 54733 88.5% 1096 100.0%

Bronx VINY5 2011 2011 30785 45.8% 869 92.2%

Brooklyn NY 2010 1917/2004 57020 78.9% 854 83.0%

Brooklyn II NY 2011 2006 41600 90.7% 851 100.0%

Brooklyn III NY 2011 2006 37717 83.9% 796 100.0%

Brooklyn IV NY 2011 2007 47070 86.8% 887 100.0%

Brooklyn VNY 2011 2007 74305 80.0% 1417 94.7%

Brooklyn VI NY 2011 2006 72710 88.2% 1399 100.0%

Queens NY 2010 1962/2003 60945 85.7% 1148 25.3%

WyckoffNY 2010 1910/2007 61960 74.3% 1042 90.2%

NewRochelleNY 2005 1998 48415 67.9% 401 15.0%

North Babylon NY 1998 1988/99 78188 87.6% 651 9.0%

Riverhead NY 2005 1985/86/99 38340 92.0% 327 0.0%

SoutholdNY 2005 1989 58901 76.9% 602 3.0%

TuckahoeNY 2011 2007 52958 71.3% 763 99.2%

WhitePlainsNY 2011 1938 87855 79.0% 1510 77.1%

Woodhaven NY 2011 2008 45800 72.4% 1029 100.0%

YorktownNY 2011 2006 78615 85.8% 782 63.3%

BoardmanOH 1980 1980/89 65495 81.1% 513 24.0%

Centerville OH 2004 1976 80690 1.6% 642 0.0%

Centerville II OH 2004 1976 43100 73.7% 303 0.0%

ClevelandlOH 2005 1997/99 46050 83.8% 338 5.0%

Cleveland II OH 2005 2000 58425 1.0% 559 0.0%

Columbus OH 2006 1999 72155 81.0% 605 26.1%

DaytonlOH 2004 1978 43100 68.0% 341 0.0%

DaytonllOH 2005 1989/00 48149 77.3% 391 1.7%

Grove City OH 2006 1997 89290 79.5% 772 16.9%

Hilliard OH 2006 1995 89690 77.7% 779 24.5%

Lakewood OH 1989 1989 39287 84.4% 458 24.6%

Marblehead OH 2005 1988/98 52300 82.8% 377 0.0%

Mason OH 1998 1981 33900 78.7% 275 0.0%

27

Year Acquired Year Rentable Manager Climate

Facility Location Developed Built Square Feet Occupancy Units Apartment Controlled

Miamisburg OH 2004 1975 59930 68.7% 430 0.0%

Middleburg Heights OH 1980 1980 93025 76.8% 676 3.8%

North Olmsted OH 1979 1979 48665 82.7% 442 7.0%

North Olmsted II OH 1988 1988 47850 87.3% 395 14.2%

North Randall OH 1998 1998/02 80049 85.0% 800 90.8%

Reynoldsburg OH 2006 1979 66895 74.5% 664 0.0%

Strongsville OH 2007 1978 43507 81.4% 400 100.0%

Warrensville Heights OH 1980 1980/82/98 90281 84.3% 722 0.0%

Westlake OH 2005 2001 62750 83.0% 453 6.1%

YoungstownOH 1977 1977 65950 77.6% 519 1.2%

Levittown PA 2001 2000 76180 81.7% 654 36.3%

NorristownPA 2011 2005 52001 69.0% 539 66.0%

Philadelphia PA 2001 1999 97439 88.0% 958 47.0%

Alcoa TN 2005 1986 42250 86.9% 353 0.0%

Antioch TN 2005 1985/98 76160 82.8% 618 8.5%

CordovalTN 2005 1987 54125 76.4% 388 0.0%

CordovallTN 2006 1995 67800 83.6% 712 7.2%

Knoxville TN 1997 1984 29337 78.2% 281 6.6%

Knoxville II TN 1997 1985 37864 1.2% 327 6.9%

KnoxvillelllTN 1998 1991 45736 76.9% 445 6.9%

KnoxvillelVTN 1998 1983 58752 69.1% 438 1.1%

Knoxville TN 1998 1977 42790 75.5% 373 0.0%

Knoxville VI TN 2005 1975 63440 84.3% 582 0.0%

Knoxville VII TN 2005 1983 55094 66.8% 452 0.0%

Knoxville VIII TN 2005 1978 95868 75.6% 763 0.0%

Memphis TN 2001 1999 92320 84.9% 698 57.1%

Memphis II TN 2001 2000 71710 77.2% 556 46.3%

Memphis III TN 2005 1983 40507 83.4% 347 6.2%

Memphis IV TN 2005 1986 38678 78.3% 319 4.1%

Memphis VTN 2005 1981 60120 79.2% 498 0.0%

Memphis VITN 2006 1985/93 108996 81.7% 875 3.5%

MemphisVllTN 2006 1980/85 115703 68.7% 571 0.0%

Memphis VIII TN 2006 1990 96060 76.4% 548 0.0%

Nashville TN 2005 1984 103910 72.5% 693 0.0%

NashvillellTN 2005 1986/00 83484 82.6% 631 6.5%

Nashville III TN 2006 1985 101475 73.8% 598 5.2%

Nashville IV TN 2006 1986/00 102450 84.7% 728 7.0%

AustinlTX 2005 2001 59520 79.0% 538 58.8%

Austin II TX 2006 2000/03 65241 83.5% 594 38.9%

Austin III TX 2006 2004 70560 87.2% 580 85.4%

Baytown TX 2005 1981 38950 76.7% 355 0.0%

Bryan TX 2005 1994 60450 60.4% 495 0.0%

College Station TX 2005 1993 26559 70.2% 346 0.0%

Dallas TX 2005 2000 58532 87.1% 536 28.4%

DentonTX 2006 1996 60836 81.4% 462 3.9%

ElPasoITX 2005 1980 59452 88.4% 517 0.9%

El Paso II TX 2005 1980 48704 91.7% 412 0.0%

ElPasoIIITX 2005 1980 71276 79.6% 585 2.0%

El Paso IV TX 2005 1983 67058 83.8% 526 3.2%

ElPasoVTX 2005 1982 62290 79.5% 399 0.0%

El Paso VI TX 2005 1985 36620 86.7% 259 0.0%

El Paso VII TX 2005 1982 34545 80.7% 13 0.0%

FortWorthlTX 2005 2000 50621 75.7% 406 26.6%

FortWorthllTX 2006 2003 72725 84.9% 653 49.1%

Frisco TX 2005 1996 50854 80.6% 431 17.5%

Frisco II TX 2005 1998/02 71299 82.6% 515 24.2%

FriscolllTX 2006 2004 74965 87.6% 609 85.7%

28

Facility Location

Frisco IV TXGarland TX

Garland II TX

Greenville TXGreenville II TXHouston TX

Houston II TXHouston III TXHouston IV TX

Houston TXHouston VI TX

Keller TXLa Porte TX

Lewisville TX

Mansfield TX

McKinney TX

McKinney II TX

North Richiand Hills TX..

Roanoke TX

San Antonio TXSan Antonio II TX

San Antonio III TXSherman TXSherman II TX

Spring TX

Murray UT

Murray II UTSalt Lake City UTSalt Lake City II UT

Fredericksburg VAFredericksburg II VABurke Lake VALeesburg VAMcLearen VAMannasas VAMilwaukee WI

________________________

TotaL/Weighted

Average

370 facilities 24420369 78.4% 222740

Denotes facilities developed by us

Denotes facilities that contain commercial rentable square footage All of this commercial space which was developed in

conjunction with the self-storage cubes is located within or adjacent to our self-storage facilities and is managed by our self-storage

facility managers As of December 31 2011 there was an aggregate of approximately 420000 rentable square feet of commercial

space at these facilities

Represents the year acquired for those facilities acquired from third party or the year developed for those facilities developed by

us

Represents occupied squarefeet divided by total rentable square feet at December 31 2011

Indicates whether facility has an on-site apartment where manager resides

Represents the percentage of rentablesquare feet in climate-controlled cubes

Year Acquired Year Rentable Manager Climate

Developed Built Square Feet Occupancy Units Apartment Controlled

2006 2004 74835 73.8% 512 16.4%

2006 1991 70100 76.4% 658 4.4%

2006 2004 68425 78.1% 470 39.6%

2005 2001/04 59385 82.6% 451 28.8%

2005 2001 44900 76.6% 312 36.3%

2005 1981 100530 73.0% 625 0.0%

2005 1977 71300 72.8% 391 0.0%

2005 1984 61120 66.0% 462 4.3%

2005 1987 43975 77.3% 383 6.1%

2006 1980/1997 125930 74.8% 1010 55.1%

2011 2002 54680 83.6% 587 100.0%

2006 2000 61885 83.0% 486 21.1%

2005 1984 44800 76.8% 426 18.5%

2006 1996 58140 67.6% 429 19.9%

2006 2003 63075 84.3% 493 38.4%

2005 1996 47020 86.0% 368 9.2%

2006 1996 70050 78.6% 537 46.3%

2005 2002 57200 79.5% 433 47.6%

2005 1996/01 59300 91.7% 449 30.0%

2005 2005 73305 82.0% 573 79.0%

2006 2005 73230 86.6% 669 82.3%

2007 2006 71775 83.7% 569 87.4%

2005 1998 54975 84.5% 500 21.1%

2005 1996 48425 82.0% 391 30.9%

2006 1980/86 72751 72.0% 537 14.1%

2005 1976 60380 77.5% 642 0.0%

2005 1978 71221 86.3% 371 2.6%

2005 1976 56446 72.1% 727 0.0%

2005 1978 51676 68.7% 486 0.0%

2005 2001/04 69475 76.4% 601 21.4%

2005 1998/01 61207 69.1% 559 100.0%

2011 2003 90727 85.1% 909 72.7%

2011 2001/04 85503 90.5% 890 75.5%

2010 2002 69240 86.4% 717 90.6%

2010 1998 73045 81.2% 640 50.9%

2004 1988 58500 76.3% 485 0.0%

29

We do not own the land at these facilities We lease the land pursuant to ground leases that expire between 2013 and 2054 but

have renewal options

We have ground leases for certain small parcels of land adjacent to these facilities that expire between 2012 and 2015

We have grown by adding facilities to our portfolio through acquisitions and development The tables set forth below show the

average occupancy annual rent per occupied square foot average occupied square feet and total revenues for our facilities owned as

of December 31 2011 and for each of the previous three years grouped by the year during which we first owned or operated the

facility

Facilities by Year Acquired Average Occupied Square Feet

Rentable Square Average Occupancy

Year Acquired of Facilities Feet 2011 2010 2009

2008 and earlier 332 21898596 78.8% 76.8% 75.9%

2009

2010 12 739111 69.1% 67.7%

2011 26 1782662 78.7% ___________All Facilities Owned

as of

December 31 2011 370 24420369 78.5% 76.7% 75.9%

Facilities by Year Acquired Annual Rent Per Occupied Square Foot

Rent per Square Foot

YearAcquired2 ofFacilities 2011 2010 2009

2008andearlier 332 11.78 11.61 11.76

2009

2010 12 19.24 13.50

20115 26 22.80

All Facilities Owned as of

December3l2011 370 12.79 11.66 11.76

Facilities by Year Acquired Average Occupied Square Feet

Average Occupied Square Feet

YearAcquired2 ofFacilities 2011 2010 2009

2008 and earlier 332 17231969 17580885 180437242009

2010 12 510496 4809182011 26 1409521

All Facilities Owned as of December 31 2011 370 19151986 18061803 18043724

Facilities by Year Acquired Total Revenues dollars in thousands

Total Revenues

Year Acquired of Facilities 2011 2010 2009

2008 and earlier 332 211102 210749 2166492009

2010 12 10169 1663

20115 26 9548

AllFacilitiesOwnedasofDecember3l2011 370 230819 212412 216649

30

Determined by dividing the aggregate rental revenue for each twelve-month period by the average of the month-end occupied

squarefeet for the period Rental revenue includes customer rental revenues access administrative and late fees and revenues from

auctions but does not include ancillary revenues generated at our facilities

For facilities developed by us Year Acquired represents the year in which such facilities were acquired by our operating

partnership from an affiliated entity which in some cases is later than the year developed

Represents the average of the aggregate month-end occupied square feet for the twelve-month period for each group of facilities

Represents the result obtained by multiplying total income per occupied square foot by the average occupied squarefeet for the

twelve-month period for each group of facilities This result will vary from amounts reported on the financial statements

Facility count does not include the Phoenix parcel acquisition in 2011 The parcel is adjacent to property that was purchased in

2006 and is therefore consolidated with that property

Planned Renovations and Improvements

We have capital improvement and property renovation program that includes office upgrades adding climate control at selected

cubes construction of parking areas safety and security enhancements and general facility upgrades For 2012 we anticipate

spending approximately $7 million to $9 million associated with these capital expenditures and expect to enhance the safety and

improve the aesthetic appeal of our facilities

In connection with our name change on September 14 2011 from U-Store-It Trust to CubeSmart we have and will continue to

incur additional costs related to our rebranding initiative We expect to complete the rebranding for all owned locations by the end of

2012 The primary cost of the rebranding relates to new signage at each of our facilities Also during 2011 we introduced our store

upgrade program SuperStore which added more personalized services and technology to several of our stores including storage

customization logistics services comprehensive moving services organizational services and office amenities During 2011 we

incurred costs related to the SuperStore and rebranding initiatives totaling approximately $4 million of which approximately $0.7

million were expensed We expect additional capital improvements totaling approximately $8 million related to these two initiatives

through December 31 2012

ITEM LEGAL PROCEEDINGS

We are involved in claims from time to time including the proceeding identified below which arise in the ordinary course of

business In the opinion of management we have made adequate provisions for potential liabilities if any arising from any such

matters However litigation is inherently unpredictable and the costs and other effects of pending or future litigation governmental

investigations legal and administrative cases and proceedings whether civil or criminal settlements judgments and investigations

claims and changes in any such matters could have material adverse effect on our business financial condition and operating

results

On November 2009 our Operating Partnership was sued in the Delaware Court of Chancery by Robert Amsdell Barry

Amsdell and Amsdell Holdings Inc collectively the Amsdell Plaintiffs The Amsdell Plaintiffs amended their complaint in

2010 to include the Parent Company as defendant The Amsdell Plaintiffs lawsuit seeks to compel our Operating Partnership to

indemnify the Amsdell Plaintiffs for losses and expenses allegedly incurred by the Amsdell Plaintiffs from legal proceedings filed

against the Amsdell Plaintiffs which proceedings alleged inter alia that the Amsdell Plaintiffs breached an agreement to purchase

certain real estate located in Brighton Massachusetts in 2001 We are vigorously defending against this action The Amsdell

Plaintiffs have filed motion for summary judgment and the Operating Partnership and the Parent Company have filed cross-motion

for summary judgment Both motions are pending before the Delaware Court of Chancery While management currently believes

that resolving this matter will not have material adverse impact on our business financial condition or operating results litigation

as noted above is subject to inherent uncertainties and managements view of this matter may change in the future

ITEM MINING SAFETY DISCLOSURES

None

31

PART

ITEM MARKET FOR REGISTRANTS COMMON EQUITY RELA TED SHAREHOLDER MATTERS AND ISSUER

PURCHASES OF EQUITY SECURITIES

As of December 31 2011 there were approximately 69 registered record holders of the Parent Companys common shares and 15

holders of the Operating Partnerships Units other than the Parent Company These figures do not include beneficial owners who

hold shares in nominee name There is no established trading market for the Units of the Operating Partnership The following table

shows the high and low closing prices pershare for our common shares as reported by the New York Stock Exchange and the cash

dividends declared with respect to such shares

Cash Dividends

High Low Declared

2010

First quarter 7.70 6.31 0.025

Second quarter8.98 7.25 0.025

Third quarter 8.86 6.88 0.025

Fourthquarter 9.56 8.19 0.070

2011

First quarter 10.57 9.20 0.070

Secondquarter 11.39 9.93 0.070

Third quarter 11.15 8.53 0.070

Fourthquarter 10.66 8.04 0.080

For each quarter in 2010 and 2011 the Operating Partnership paid cash distribution per Unit in an amount equal to the dividend

paid on common share for each such quarter

Since our initial quarter as publicly-traded REIT we have made regular quarterly distributions to our shareholders Distributions

to shareholders are usually taxable as ordinary income although portion of the distribution may be designated as capital gain or may

constitute tax-free return of capital Annually we provide each of our shareholders statement detailing distributions paid during

the preceding year and their characterization as ordinary income capital gain or return of capital The characterization of our

dividends for 2011 was as follows 78.0704% ordinary income distribution 11.9314% capital gain distribution and 9.9982% return of

capital distribution from earnings and profits

We intend to continue to declare quarterly distributions However we cannot provide any assurance as to the amount or timing of

future distributions Under the revolving portion of our 2011 Credit Facility we are restricted from paying distributions on our

common shares that would exceed an amount equal to the greater of 95% of our funds from operations and ii such amount as

may be necessary to maintain our REIT status

To the extent that we make distributions in excess of our earnings and profits as computed for federal income tax purposes these

distributions will represent return of capital rather than dividend for federal income tax purposes Distributions that are treated as

return of capital for federal income tax purposes generally will not be taxable as dividend to U.S shareholder but will reduce the

shareholders basis in its shares but not below zero and therefore can result in the shareholder having higher gain upon

subsequent sale of such shares Return of capital distributions in excess of shareholders basis generally will be treated as gain from

the sale of such shares for federal income tax purposes

Use of Proceeds

On October 28 2011 we completed an underwritten public offering of 23000000 common shares including 3000000 shares sold

pursuant to the full exercise of the underwriters overallotment option under an existing shelf registration statement on Form S-3

registration no 333-176885 which became effective on September 16 2011 the Registration Statement at price of $9.20 per

common share providing gross proceeds of $211.6 million and net proceeds of $202.5 million after deducting the underwriting

discount and other offering expenses The common share offering was led by managing underwriters Wells Fargo Securities and

Bank of America Merrill Lynch Pierce Fenner and Smith

On November 2011 we completed public offering of 3100000 7.75% Series Cumulative Redeemable Preferred Shares the

Preferred Shares including 300000 shares sold pursuant to the partial exercise of the underwriters overallotment option under the

Registration Statement at price of $25.00 perPreferred Share providing gross proceeds of $77.5 million and net proceeds of $74.8

32

million after deducting the underwriting discount and other estimated offering expenses and together with the net proceeds received

from the common share offering total financing of $277.3 million The Preferred Share offering was led by managing underwriters

Wells Fargo Securities LLC Bank of America Merrill Lynch Pierce Fenner Smith Incorporated Morgan Keegan Company

Inc Raymond James Associates Inc and Stifel Nicolaus Company Incorporated

Share Performance Graph

The SEC requires us to present chart comparing the cumulative total shareholder return on our common shares with the

cumulative total shareholder return of broad equity index and ii published industry or peer group index The following chart

compares the yearly cumulative total shareholder return for our common shares with the cumulative shareholder return of companies

on the SP 500 Index ii the Russell 2000 and iii the NAREIT All Equity REIT Index as provided by NAREIT for the period

beginning December 31 2006 and ending December 31 2011

120

Total Return Performance

100

80

60

40

20

12/31/06 12/31/07 12/31/08 12/31/09 12/31/10

Index

-CubeSmart u----SP500 A-RusseII2000_-.__NAREITAJIEquityREITIndex

CubeSmart

SP 500

Russell 2000

NAREIT All Equity REIT Index

12/3 1/1

Period Ending

12/31/06 12/31/07 12/31/08 12/31/09 12/31/10 12/31/11

100.00 47.66 24.80 41.86 55.21 63.47

100.00 105.49 66.46 84.05 96.71 98.76

100.00 98.43 65.18 82.89 105.14 100.75

100.00 84.31 52.50 67.20 85.98 93.10

33

The following table provides information about repurchases of the Parent Companys common shares during the three-month period

ended December 31 2011Total Number of Maximum Number

Shares Purchased as of Shares that MayPart of Publicly Yet Be Purchased

Total Number of Average Price Paid Announced Plans or Under the Plans

Shares Purchased Per Share Programs

October 170 8.04 N/A 3000000

November N/A N/A N/A 3000000December 544 10.18 N/A 3000000

Total 714 N/A 3000000

Represents common shares withheld by the Parent Company upon the vesting of restricted shares to cover employee tax

obligations

On June 27 2007 we announced that the Board of Trustees approved share repurchase program for up to 3.0 million of the

Parent Companys outstanding common shares Unless terminated earlier by resolution of the Board of Trustees the program will

expire when the number of authorized shares has been repurchased We have made no repurchases under this program

ITEM SELECTED FINANCIAL DATA

CUBESMART

The following table sets forth selected financial and operating data on historical consolidated basis for the Parent Company The

selected historical financial information for the five-year period ended December 31 2011 was derived from the Parent Companysfinancial statements

34

The following data should be read in conjunction with the audited financial statements and notes thereto of the Parent Company and

Managements Discussion and Analysis of Financial Condition and Results of Operations included elsewhere in this report

Weighted-average basic and diluted shares

outstanding

AMOUNTS ATTRIBUTABLE TO THE COMPANYSCOMMON SHAREHOLDERS

Loss from continuing operations

Total discontinued operations

Net loss income

REVENUESRental income

Other property related income

Other related party

Property management fee income

Total revenues

OPERATING EXPENSES

Property operating expenses

Property operating expenses related party

Depreciation and amortization

Lease abandonment

General and administrative

General and administrative related party

Total operating expenses

OPERATING INCOMEOTHER INCOME EXPENSE

Interest

Interest expense on loans

Loan procurement amortization expense

Loan procurement amortization

expense early repayment of debt

Acquisition related costs

Equity in losses of real estate ventures

Other

Total other expense

LOSS FROM CONTINUING OPERATIONSDISCONTINUED OPERATIONS

Income from discontinued operations

Net gain on disposition of discontinued

operations

Total discontinued operations

NET INCOME LOSSNET INCOME LOSS ATTRIBUTABLE TO

NONCONROLLING INTERESTS

Noncontrolling interests in the Operating

Partnership

Noncontrolling interest in subsidiaries

NET LOSS INCOME ATTRIBUTABLETO THE COMPANYDistribution to Preferred Shares

NET LOSS INCOME ATTRIBUTABLE TO COMMONSHAREHOLDERS OF THE COMPANY

Basic and diluted loss per share from continuing operations

attributable to common shareholders

Basic and diluted earnings per share from

discontinued operations attributable to common shareholders

Basic and diluted loss earnings per share

attributable to common shareholders

81673823

28183

505815052

759

386

4463011996

648

4696021291

247

5369627634

For the year ended December 31

2011 2010 2009 2008 2007

Dollars and shares in thousands except per share data

212106 188922 188101 195455 180048

21731 17978 15460 14500 14938

365

3768 2829 56

237605 209729 203617 209955 195351

99160 90261 88395 89164 83343

59

68223 61428 66984 69765 61020-- 1316

24693 25406 22569 24964 21966

337

192076 177095 177948 183893 168041

45529 32634 25669 26062 27310

33199 37794 45269 52014 541085028 6463 2339 1929 1772

519

553628051

398 130771218

1616 7393 937 13077

0.09 0.14 0.29 0.45

0.07 0.06 0.28 0.49 0.22

0.02 0.08 0.01 0.05 0.23

8815 13095 20806 25454 257487199 5702 19869 28246 1267

1616 7393 937 2792 13077

3596

3903

7499

2447

352810

4151

1826

5977

6019

381

1755

7393

6820

14139

20959

332

60

665

937

11287

2517

13804

14247

1170

11016

19720

30736

3102

310

2792

2792

0.44

102976 93998 70988 57621 57497

35

At December 31

2011 2010 2009 2008 2007

Balance Sheet Data in thousands

Storage facilities net 1788720 1428491 1430533 1559958 $1647118Total assets 1875979 1478819 1598870 1597659 1687831

Revolving credit facility 43000 172000 219000Unsecured term loan 400000 200000 200000 200000Secured term loan 200000 57419 47444

Mortgage loans and notes payable 358441 372457 569026 548085 561057

Total liabilities 830925 668266 814146 1028705 1083230

Noncontrolling interest in the

Operating Partnership 49732 45145 45394 46026 48982CubeSmartshareholders equity 955913 724216 695309 522928 555619

Noncontrolling interests in subsidiaries 39409 41192 44021

Total liabilities and equity 1875979 1478819 1598870 1597659 1687831

Other Data

Number of facilities 370 363 367 387 409

Total rentable square feet in thousands 24420 23635 23749 24973 26119

Occupancy percentage 78.4% 76.3% 75.2% 78.9% 79.5%

Cash dividends declared per share 0.290 0.145 0.10 0.565 1.05

Excludes operating partnership units issued at our IPO and in connection with the acquisition of facilities subsequent to our IPO

Operating partnership units have been excluded from the earnings pershare calculations as the related income or loss is presented

in Noncontrolling interests in the Operating Partnership

The Company announced full quarterly dividends of $0.29 per common share on February 21 2007 May 2007 and August 14

2007 dividends of $0.18 per common share on December 13 2007 February 27 2008 May 2008 and August 2008dividends of $0025 per common share on December 11 2008 January 22 2009 April 222009 July 22 2009 October 22

2009 December 2009 February 24 2010 June 2010 and August 2010 dividends of $0.07 per common share on

December 14 2010 February 29 2011 June 2011 and August 2011 and dividends of $0.08 and $0.39 per common and

preferred shares respectively on December 2011

CUBESMART L.P

The following table sets forth selected financial and operating data on historical consolidated basis for the Operating Partnership

The selected financial data for the periods ended December 31 2011 2010 2009 and 2008 have been derived from the historical

consolidated financial statements of CubeSmart L.P and subsidiaries which have been audited by KPMG The selected financial data

for the period ended December 31 2007 has been derived from the historical consolidated financial statements of CubeSmart L.P

and subsidiaries which have not been audited by KPMG

36

The following data should be read in conjunction with the audited financial statements and notes thereto of the Operating

Partnership and Managements Discussion and Analysis of Financial Condition and Results of Operations included elsewhere in this

report

Weighted-average basic and diluted units outstanding

88157199

1616

130955702

7393

2080619869

937

2545428246

2792

2574812671

13077

For the year ended December 31

2011 2010 2009 2008 2007

Dollars and shares in thousands except per unit data

195455 180048

14500 14938

365

209955 195351

REVENUESRental income 212106 188922 188101

Other property related income 21731 17978 15460

Other related party

Property management fee income 3768 2829 56

Total revenues 237605 209729 203617

OPERATING EXPENSES

Property operating expenses 99160 90261 88395 89164 83343

Property operating expenses related party 59

Depreciation and amortization 68223 61428 66984 69765 61020

Lease abandonment 1316

General and administrative 24693 25406 22569 24964 21966

General and administrative related party 337

Total operating expenses 192076 177095 177948 183893 168041

OPERATING INCOME 45529 32634 25669 26062 27310

OTHER INCOME EXPENSEInterest

Interest expense on loans 33199 37794 45269 52014 54108Loan procurement amortization expense 5028 6463 2339 1929 1772Loan procurement amortization

expense early repayment of debt 8167Acquisition related costs 3823 759Equity in losses of real estate ventures 281Other 83 386 648 247 519

Total other expense 50581 44630 46960 53696 55361LOSS FROM CONTINUING OPERATIONS 5052 11996 21291 27634 28051DISCONTINUED OPERATIONS

Income from discontinued operations 3596 4151 6820 11016 11287

Net gain on disposition of discontinued operations 3903 1826 14139 19720 2517

Total discontinued operations 7499 5977 20959 30736 13804

NET INCOME LOSS 2447 6019 332 3102 14247NET LOSS INCOME ATTRIBUTABLE TO

NONCONROLLING INTERESTS

Noncontrolling interest in subsidiaries 2810 1755 665NET LOSS INCOME ATTRIBUTABLE TO

CUBESMART L.P 363 7774 997 3102 14247Limited Partnership interest of third parties 35 381 60 310 1170

NET LOSS INCOME ATTRIBUTABLE TOOPERATING PARTNER 398 7393 937 2792 13077Distribution to Preferred Shares 1218

NETLOSS INCOME ATTRIBUTABLE TOCOMMON UNITHOLDERS 1616 7393 937 2792 13077

Basic and diluted loss per unit from continuing

operations attributable to common unitholders 0.09 0.14 0.29 0.44 0.45

Basic and diluted earnings per unit from discontinued

operations attributable to common unitholders 0.07 0.06 0.28 0.49 0.22

Basic and diluted loss earnings per unit attributable

to common unitholders 0.02 0.08 0.01 0.05 0.23

AMOUNTS ATTRIBUTABLE TO COMMONUNITHOLDERS

Loss from continuing operations

Total discontinued operations

Net loss income

102976 93998 70988 57621 57497

37

At December 312011 2010 2009 2008 2007

Balance Sheet Data in thousands

Storage facilities net 1788720 1428491 1430533 1559958 1647118Total assets 1875979 1478819 1598870 1597659 1687831

Revolving credit facility 43000 172000 219000Unsecured term loan 400000 200000 200000 200000Secured term loan 200000 57419 47444

Mortgage loans andnotes payable 358441 372457 569026 548085 561057

Total liabilities 830925 668266 814146 1028705 1083230Linited Partnetship interest of third

parties 49732 45145 45394 46026 48982CubeSmart L.P Capital 955913 724216 695309 522928 555619

Noncontrolling interests in subsidiaries 39409 41192 44021

Total liabilities and capital 1875979 1478819 1598870 1597659 1687831

Other Data

Number of facilities 370 363 367 387 409

Total rentable square feet in thousands 24420 23635 23749 24973 26119

Occupancy percentage 78.4% 76.3% 75.2% 78.9% 79.5%

Cash dividends declared per unit 0.290 0.145 0.10 0.565 1.05

Excludes operating partnership units issued at the Parent Companys IPO and in connection with the acquisition of facilities

subsequent to the Parent Companys IPO Operating partnership units have been excluded from the earnings per share

calculations as the related income or loss is presented in Limited Partnership interest of third parties

The Operating Partnership announced full quarterly dividends of $0.29 per common unit on February 21 2007 May 2007 and

August 14 2007 dividends of $0.18 per common unit on December 13 2007 February 27 2008 May 2008 and August

2008 dividends of $0.025 per common unit on December 11 2008 January 22 2009 April 22 2009 July 22 2009 October 22

2009 December 2009 February 24 2010 June 2010 and August 2010 dividends of $0.07 per common unit on

December 14 2010 February 29 2011 June 2011 and August 2011 and dividends of $0.08 and $0.39 per common and

preferred units respectively on December 2011

38

ITEM MANAGEMENTS DISCUSSION AND ANAL YSIS OF FINANCIAL CONDITION AND RESULTS OFOPERATIONS

The following discussion should be read in conjunction with the financial statements and notes thereto appearing elsewhere in this

report The Company makes certain statements in this section that are forward-looking statements within the meaning of thefederal

securities laws For complete discussion offorward-looking statements see the section in this report entitled Forward-Looking

Statements Certain risk factors may cause actual results performance or achievements to differ materially from those expressed or

implied by the following discussion For discussion of such risk factors see the section in this report entitled Risk Factors

Overview

The Company is an integrated self-storage real estate company and as such we have in-house capabilities in the operation design

development leasing management and acquisition of self-storage facilities The Parent Companys operations are conducted solely

through the Operating Partnership and its subsidiaries Effective September 14 2011 the Parent Company changed its name from

Store-It Trust to CubeSmart and the Operating Partnership changed its name from U-Store-It L.P to CubeSmart L.P The

Parent Company has elected to be taxed as REIT for U.S federal income tax purposes As of December 31 2011 and December 31

2010 the Company owned 370 and 363 self-storage facilities respectively totaling approximately 24.4 million rentable square feet

and 23.6 million rentable square feet respectively As of December 31 2011 the Company owned facilities in the District of

Columbia and the following 26 states Alabama Arizona California Colorado Connecticut Florida Georgia Illinois Indiana

Louisiana Maryland Massachusetts Michigan Mississippi Nevada New Jersey New Mexico New York North Carolina Ohio

Pennsylvania Tennessee Texas Utah Virginia and Wisconsin In addition as of December 31 2011 the Company managed 103

properties for third parties bringing the total number of properties which it owned andlor managed to 473 As of December 31 2011

the Company managed facilities in the District of Columbia and the following states Arkansas California Colorado Connecticut

Delaware Florida Georgia Illinois Massachusetts Maryland Michigan New Hampshire Minnesota New Jersey New York Ohio

Pennsylvania Rhode Island Texas and Virginia

The Company derives revenues principally from rents received from its customers who rent cubes at its self-storage facilities under

month-to-month leases Therefore our operating results depend materially on our ability to retain our existing customers and lease

our available self-storage cubes to new customers while maintaining and where possible increasing our pricing levels In addition

our operating results depend on the ability of our customers to make required rental payments to us We have decentralized

approach to the management and operation of our facilities which places an emphasis on local market level oversight and control

We believe this approach allows us to respond quickly and effectively to changes in local market conditions and to maximize

revenues by managing rental rates and occupancy levels

The Company typically experiences seasonal fluctuations in the occupancy levels of our facilities which are generally slightly

higher during the summer months due to increased moving activity

The United States continues to recover from an economic downturn that resulted in higher unemployment stagnant employment

growth shrinking demand for products large-scale business failures and tight credit markets Our results of operations may be

sensitive to changes in overall economic conditions that impact consumer spending including discretionary spending as well as to

increased bad debts due to recessionary pressures continuation of or slow recovery from ongoing adverse economic

conditions affecting disposable consumer income such as employment levels business conditions interest rates tax rates fuel and

energy costs and other matters could reduce consumer spending or cause consumers to shift their spending to other products and

services general reduction in the level of discretionary spending or shifts in consumer discretionary spending could adversely

affect our growth and profitability

In the future the Company intends to focus on maximizing internal growth opportunities and selectively pursuing targeted

acquisitions and developments of self-storage facilities

The Company has one reportable segment we own operate develop manage and acquire self-storage facilities

The Companys self-storage facilities are located in major metropolitan and rural areas and have numerous tenants per facility No

single tenant represents significant concentration of our revenues The facilities in Florida California Texas and Illinois provided

approximately 17% 12% 10% and 7% respectively of total revenues for the year ended December 31 2011

Through our November 2011 Storage Deluxe Acquisition the Company acquired properties that contain an aggregate of 1.0

million net rentable square feet and increased its footprint in the New York Connecticut and Pennsylvania markets We believe that

the Storage Deluxe Acquisition will have positive impact on our future operating results and financial condition and that this impact

is not yet reflected in the historical financial information presented in this Annual Report on Form 10-K because the Storage Deluxe

Acquisition occurred late in the year ended December 31 2011

39

Summary of Critical Accounting Policies and Estimates

Set forth below is summary of the accounting policies that management believes are critical to the preparation of the consolidated

financial statements included in this Annual Report on Form 10-K Certain of the accounting policies used in the preparation of these

consolidated financial statements are particularly important for an understanding of the financial position and results of operations

presented in the historical consolidated financial statements included in this report summary of significant accounting policies is

also provided in the notes to our consolidated financial statements See Note to the consolidated financial statements These

policies require the application ofjudgment and assumptions by management and as result are subject to degree of uncertainty

Due to this uncertainty actual results could differ materially from estimates calculated and utilized by management

Basis of Presentation

The accompanying consolidated financial statements include all of the accounts of the Company and its majority-owned andlor

controlled subsidiaries The portion of these entities not owned by the Company is presented as noncontrolling interests as of and

during the periods presented All significant intercompany accounts and transactions have been eliminated in consolidation

When the Company obtains an economic interest in an entity the Company evaluates the entity to determine if the entity is deemed

variable interest entity VIE and if the Company is deemed to be the primary beneficiary in accordance with authoritative

guidance issued by the Financial Accounting Standards Board FASB on the consolidation of VIEs When an entity is not deemed

to be VIE the Company considers the provisions of additional FASB guidance to determine whether general partner or the

general partners as group controls limited partnership or similar entity when the limited partners have certain rights The

Company consolidates entities that are VIEs and of which the Company is deemed to be the primary beneficiary and ii entities

that are non-VIEs which the Company controls and in which the limited partners do not have substantive participating rights or the

ability to dissolve the entity or remove the Company without cause

Self-Storage Facilities

The Company records self-storage facilities at cost less accumulated depreciation Depreciation on the buildings and equipment is

recorded on straight-line basis over their estimated useful lives which range from five to 40 years Expenditures for significant

renovations or improvements that extend the useful life of assets are capitalized Repairs and maintenance costs are expensed as

incurred

When facilities are acquired the purchase price is allocated to the tangible and intangible assets acquired and liabilities assumed

based on estimated fair values When portfolio of facilities is acquired the purchase price is allocated to the individual facilities

based upon an income approach or cash flow analysis using appropriate risk adjusted capitalization rates which take into account

the relative size age and location of the individual facility along with current and projected occupancy and rental rate levels or

appraised values if available Allocations to the individual assets and liabilities are based upon comparable market sales information

for land buildings and improvements and estimates of depreciated replacement cost of equipment

In allocating the purchase price for an acquisition the Company determines whether the acquisition includes intangible assets or

liabilities The Company allocated portion of the purchase price to an intangible asset attributed to the value of in-place leases This

intangible is generally amortized to expense over the expected remaining term of the respective leases Substantially all of the leases

in place at acquired facilities are at market rates as the majority of the leases are month-to-month contracts Accordingly to date no

portion of the purchase price has been allocated to above- or below-market lease intangibles To date no intangible asset has been

recorded for the value of tenant relationships because the Company does not have any concentrations of significant tenants and the

average tenant turnover is fairly frequent

Long-lived assets classified as held for use are reviewed for impairment when events and circumstances such as declines in

occupancy and operating results indicate that there may be impairment The carrying value of these long-lived assets is compared to

the undiscounted future net operating cash flows plus terminal value attributable to the assets to determine if the propertys basis is

recoverable If propertys basis is not considered recoverable an impairment loss is recorded to the extent the net carrying value of

the asset exceeds the fair value The impairment loss recognized equals the excess of net carrying value over the related fair value of

the asset There were no impairment losses recognized in accordance with these procedures during 2011 2010 and 2009

The Company considers long-lived assets to be held for sale upon satisfaction of the following criteria management commits

to plan to sell facility or group of facilities the facility is available for immediate sale in its present condition subject only to

terms that are usual and customary for sales of such facilities an active program to locate buyer and other actions required to

complete the plan to sell the facility have been initiated the sale of the facility is probable and transfer of the asset is expected to

40

be completed within one year the facility is being actively marketed for sale at price that is reasonable in relation to its current

fair value and actions required to complete the plan indicate that it is unlikely that significant changes to the plan will be made or

that the plan will be withdrawn

Typically these criteria are all met when the relevant asset is under contract significant non-refundable deposits have been made by

the potential buyer the assets are immediately available for transfer and there are no contingencies related to the sale that may prevent

the transaction from closing In most transactions these contingencies are not satisfied until the actual closing of the transaction

accordingly the facility is not identified as held for sale until the closing actually occurs However each potential transaction is

evaluated based on its separate facts and circumstances Properties classified as held for sale are reported at the lesser of carrying

value or fair value less estimated costs to sell

2011

On November 2011 the Company acquired 16 properties from various entities which were branded as Storage Deluxe with

purchase price of approximately $357.3 million The 16 properties purchased are located in New York Connecticut and Pennsylvania

In connection with this acquisition the Company allocated portion of the purchase price to the intangible value of in-place leases

which aggregated $18.1 million The estimated life of these in-place leases is 12 months and the amortization expensethat was

recognized during 2011 was approximately $3.0 million

Additionally during 2011 the Company acquired 11 self-storage facilities located throughout the United States for an aggregate

purchase price of approximately $109.8 million In connection with these acquisitions the Company allocated portion of the

purchase price to the intangible value of in-place leases which aggregated $7.0 million The estimated life of these in-place leases is

12 months and the amortization expense that was recognized during 2011 was approximately $2.8 million In connection with three of

the acquisitions the Company assumed mortgage debt at fair value with an outstanding principal balance totaling $21.4 million and

recorded net premium of $0.4 million to reflect the fair values of the debt at the time of assumption

2010

On April 28 2010 the Company acquired 85 management contracts from United Stor-All Management LLC United Stor-All

The Company accounted for this acquisition as business combination The Company recorded the fair value of the assets acquired

which includes the intangible value related to the management contracts as other assets net on the Companys consolidated balance

sheet The average estimated life of the intangible value of the management contracts is 56 months and the amortization expense that

was recognized during 2011 and 2010 was approximately $1.3 million and $0.9 million respectively

During 2010 the Company acquired 12 self-storage facilities located throughout the United States In connection with these

acquisitions the Company allocated portion of the purchase price to the intangible value of in-place leases which aggregated $3.7

million The estimated life of these in-place leases was 12 months and the amortization expense that was recognized during 2011 and

2010 was approximately $3.0 million and $0.7 million respectively

Revenue Recognition

Management has determined that all our leases with tenants are operating leases Rental income is recognized in accordance with

the terms of the lease agreements or contracts which generally are month-to-month

The Company recognizes gains on disposition of properties only upon closing in accordance with the guidance on sales of real

estate Payments received from purchasers prior to closing are recorded as deposits Profit on real estate sold is recognized using the

full accrual method upon closing when the collectability of the sales price is reasonably assured and the Company is not obligated to

perform significant activities after the sale Profit may be deferred in whole or part until the sale meets the requirements of profit

recognition on sales under this guidance

Share Based Payments

We apply the fair value method of accounting for contingently issued shares and share options issued under our equity incentive

plans Accordingly share compensation expense was recorded ratably over the vesting period relating to such contingently issued

shares and options The Company has elected to recognize compensation expense on straight-line method over the requisite service

period

41

Noncontroiing Interests

Noncontrolling interests are the portion of equity net assets in subsidiary not attributable directly or indirectly to parent The

ownership interests in the subsidiary that are held by owners other than the parent are noncontrolling interests In accordance with

authoritative guidance issued on noncontrolling interests in consolidated financial statements such noncontrolling interests are

reported on the consolidated balance sheets within equity/capital separately from the Parent Companys equity/capital The guidance

also requires that noncontrolling interests are adjusted each period so that the carrying value equals the greater of its carrying value

based on the accumulation of historical cost or its redemption value On the consolidated statements of operations revenues expenses

and net income or loss from less-than-wholly-owned subsidiaries are reported at the consolidated amounts including both the amounts

attributable to the Parent Company and noncontrolling interests Presentation of consolidated equity/capital activity is included for

both quarterly and annual financial statements including beginning balances activity for the period and ending balances for

shareholders equity/capital noncontrolling interests and total equity/capital

Income Taxes

The Company elected to be taxed as real estate investment trust under Sections 85 6-860 of the Internal Revenue Code beginning

with the period from October 21 2004 commencement of operations through December 31 2004 In managements opinion the

requirements to maintain these elections are being met Accordingly no provision for federal income taxes has been reflected in the

consolidated financial statements other than for operations conducted through our taxable REIT subsidiaries

Earnings and profits which determine the taxability of distributions to shareholders differ from net income reported for financial

reporting purposes due to differences in cost basis the estimated useful lives used to compute depreciation and the allocation of net

income and loss for financial versus tax reporting purposes

The Company is subject to 4% federal excise tax if sufficient taxable income is not distributed within prescribed time limits The

excise tax equals 4% of the annual amount if any by which the sum ofa 85% of the Companys ordinary income and 95% of the

Companys net capital gain exceeds cash distributions and certain taxes paid by the Company

Recent Accounting Pronouncements

In June 2011 the Financial Accounting Standards Board FASB issued an amendment to the accounting standard for the

presentation of comprehensive income The amendment requires entities to present the total of comprehensive income the

components of net income and the components of other comprehensive income either in single continuous statement of

comprehensive income or in two separate but consecutive statements In addition the amendment requires entities to present on the

face of the financial statements reclassification adjustments for items that are reclassified from other comprehensive income to net

income in the statements where the components of net income and the components of other comprehensive income are presented

This amendment is effective for fiscal years and interim periods beginning after December 15 2011 The Companys adoption of the

new standard will not have material impact on its consolidated financial position or results of operations as the amendment relates

only to changes in financial statement presentation

Results of Operations

The following discussion of our results of operations should be read in conjunction with the consolidated financial statements and

the accompanying notes thereto Historical results set forth in the consolidated statements of operations reflect only the existing

facilities and should not be taken as indicative of future operations The Company considers its same-store portfolio to consist of only

those facilities owned and operated on stabilized basis at the beginning and at the end of the applicable years presented Same-store

results are considered to be useful to investors in evaluating our performance because they provide information relating to changes in

facility-level operating performance without taking into account the effects of acquisitions developments or dispositions For

analytical presentation all percentages are calculated using the numbers presented in the financial statements contained in this Annual

Report on Form 10-K

The Companys results of operations are affected by the acquisition and disposition activity during the 2011 2010 and 2009

periods as described below At December 31 2011 2010 and 2009 the Company owned 370 363 and 367 self-storage facilities and

related assets respectively

In 2011 27 self-storage facilities were acquired for approximately $467.1 million the 2011 Acquisitions and 19 self

storage facilities were sold for approximately $45.2 million the 2011 Dispositions

42

In 2010 12 self-storage facilities were acquired for approximately $85.1 million the 2010 Acquisitions and 16 self

storage facilities were sold for approximately $38.1 million the 2010 Dispositions

In 2009 20 self-storage facilities were sold for approximately $90.9 million the 2009 Dispositions

Comparison of the Year Ended December 31 2011 to the Year Ended December 31 2010 dollars in thousands

Depreciation and amortization

General and administrative

Subtotal

Operating income

Other Income Expense

Interest

Interest expense on loans

Loanprocurement

amortizationexpense

Loanprocurement

amortization expense

early repayment of debt

Acquisition related costs

Equity in losses of real estate

ventures

Other

Total other expense

LOSS FROM CONTINUING

OPERATIONS

DISCONTINUED OPERATIONS..

Income from discontinued

operations

Net gain on disposition of

discontinued operations

Total discontinued operations

NET INCOME LOSSNET INCOME LOSS

ATTRIBUTABLE TONONCONTROLLJNGINTERESTS

Noncontrolling interests in

the Operating Partnership

Noncontrolling interests in

subsidiaries

NET LOSS ATTRIBUTABLE

TO THE COMPANY

Same-Store Property Portfolio

Increaae/

2011 2010 Decrease __________

192514 187653 4861

18130 15636 2494

210644 203289 7355__________

68223 61428 6795 11%

24693 25406 713 .3%

92916 86834 6082 7%

45529 32634 12895 40%

33199 37794 4595 -12%

5028 6463 1435 -22%

8167 100%

759 3064 100%

281 281 100%

83 386 469 -122%

50581 44630 5951 13%

5052 11996 6944 58%

3596 4151 555 .13%

3903 1826 2077 114%

7499 5977 1522 25%

2447 6019 8466 141%

Rental income increased from $188.9 million in 2010 to $212.1 million in 2011 an increase of $23.2 million This increase is

primarily attributable to $18.3 million of additional income from the properties acquired in 2010 and 2011 and increases in average

occupancy and scheduled annual rent per square foot on the same-store portfolio which contributed $4.9 million to the increase in

rental income during 2011 as compared to 2010

Other property related income increased from $18.0 million in 2010 to $21.7 million in 2011 an increase of $3.7 million or 21%This increase is primarily attributable to increased fee revenue and insurance commissions of $3.8 million during the year ended

December 31 2011 as compared to the year ended December 31 2010 which includes an increase of $0.3 million related to the 2010

and 2011 acquisitions

Property management fee income increased to $3.8 million in 2011 from $2.8 million during 2010 an increase of$l.0 million

This increase is attributable to an increase in management fees related to the thirdparty management business 103 facilities as of

December 31 2011 compared to 93 facilities as of December 31 2010 and 12 months of management fees earned during the 2011

period related to the addition of 85 management contracts in April 2010 compared to eight months of similaractivity during the 2010

period

REVENUESRental income

Other property related income

Property management fee income

Total revenues

OPERATING EXPENSESProperty operating expenses

NET OPERATING INCOME

Non Same-Store Other/

Propertlee Eliminations

Increme/

Change 2011 2010 2011 2010 2011 2010 Decrease

3%$ 19592 1269 212106 188922 23184

16% 2011 1746 1590 596 21731 17978 3753

3768 2829 3768 2829 939

4% 21603 3015 5358 3425 237605 209729 27876

79372 79131 241 0% 7573 1960 12215 9170 99160 90261 8899 10%

131272 124158 7114 6% 14030 1055 6857 5745 138445 119468 18977 16%

Change

12%

21%

33%

13%

81673823

Revenues

35 381 416 -109%

2810 1755 1055 -60%

398 7393 6995 95%

43

Operating Expenses

Property operating expenses increased from $90.3 million in 2010 to $99.2 million in 2011 an increase of $8.9 million or 10%This increase is primarily attributable to $8.7 million of increased

expensesassociated with newly acquired properties and 12 months

ofexpenses

in the 2011 period related to the addition of 85 management contracts in April 2010 compared to only eight months of

similarexpenses

in the 2010 period In addition we experienced $0.4 million increase in rebranding and SuperStore related

expenses during the 2011 period as compared to the 2010 period

Depreciation and amortization increased from $61.4 million in 2010 to $68.2 million in 2011 an increase of $6.8 million or 11%This increase is primarily attributable to depreciation and amortization expense related to the 2010 and 2011 acquisitions recognized

in 2011 with no corresponding expense recognized in 2010

Other Income Expenses

Interest expense decreased from $37.8 million in 2010 to $33.2 million in 2011 decrease of $4.6 million or 12% Approximately

$1.6 million of the reduced interestexpense

related to approximately $210 million of net mortgage loan repayments during the period

from January 2010 through December 31 2011 Interestexpense

also decreased as result of lower interest rates on the 2011

Credit Facility during the 2011 period as compared to the interest rates on the Prior Facility during the 2010 period offset by

increased unsecured loan borrowings during the period

Loan procurement amortization expense early repayment of debt was $8.2 million for the year ended December 31 2011 with no

comparable expense during the 2010 period Thisexpense

is related to the write-off of unamortized loan procurement costs associated

with the Prior Facility

Acquisition related costs increased from $0.8 million during 2010 to $3.8 million during 2011 as result of the acquisition of 27

self-storage facilities in 2011 including 16 facilities in the Storage Deluxe Acquisition compared to 12 acquisitions during 2010

Equity in losses of real estate ventures was $0.3 million for theyear

ended December 31 2011 with no comparable expense during

the 2010 period This expense is related to earnings attributable to the HSRE Venture which was formed in September 2011

Discontinued Operations

Gains on disposition of discontinued operations increased from $1.8 million in the 2010 period to $3.9 million in the 2011 period

an increase of $2.1 million Gains during 2010 related to the sale of 16 assets during 2010 and gains during 2011 related to the sale of

19 assets during 2011

Noncontrolling Interests in Subsidiaries

Noncontrolling interests in subsidiaries increased to $2.8 million in the 2011 period from $1.8 million in the 2010 period This

increase is primarily result of increased income related to the operations our joint venture HART which was formed in

August 2009 to own and operate 22 self-storage facilities The Company retained 50% ownership interest in HART and accordingly

presents the 50% of the related results that are allocated to the venture partner as an adjustment to net income loss when arriving at

net income loss attributable to shareholders

44

Comparison of the Year Ended December 31 2010 to the Year Ended December 31 2009 dollars in thousands

Same-Store Property Portfolio Non Same-Store Other/ Total Portfolio

Dies-easel Properties Eliminations Increasel

2010 2009 Decrease change 2010 2009 2010 2009 2010 2009 Decrease

187653 188241 588 0%$ 1269 140 188922 188101 821 0%

15636 14389 1247 9% 1746 1071 596 17978 15460 2518 16%

2829 56 2829 56 2773 4952%

203289 202630 659 0% 3015 931 3425 56 209729 203617 6112 3%

7913 80200 1069 -1% 1960 622 9170 7573 90261 88395 1866 2%

124158 122430 1728 1% 1055 309 5745 7517 119468 115222 4246 4%

Other Income Expense

Interest

Interest expense on loans 37794 45269 7475 -17%

Loan procurement amortization expense 6463 2339 4124 176%

Acquisition related costs 759 759 100%

Other 386 648 262 -40%

Total other expense 44630 46960 2330 -5%

LOSS FROM CONTINUING OPERATIONS 11996 2129 9295 44%

DISCONTINUED OPERATIONS

Income from discontinued operations 4151 6820 2669 -39%

Net gain on disposition of discontinued operations 1826 14139 12313 -87%

Total discontinued operations 5977 20959 14982 71%

NET LOSS 6019 332 5687 -1713%

NET LOSS INCOME ATTRIBUTABLE TO

NONCONTROLLING INTERESTS

Noncontrolling interests in the Operating

Partnership 38 60 32 535%

Noncontrolling interests in subsidiaries 1755 665 1090 -164%

NET LOSS ATTRIBUTABLE TO THE COMPANY 7393 937 6456 -689%

Revenues

Rental income increased from $188.1 million in 2009 to $188.9 million in 2010 an increase of $0.8 million This increase is

primarily attributable to additional income from the 2010 acquisitions of approximately $1.4 million in 2010 with no similar income in

2009 offset by decrease in the realized annual rent per square foot of 1% related to the same-store property portfolio which resulted

in $0.6 million decrease in same-store rental income

Other property related income increased from $15.5 million in 2009 to $18.0 million in 2010 an increase of $2.5 million or 16%This increase is primarily attributable to increased fee revenue and insurance commissions related to the same-store properties of $1.1

million and an increase in other property related income of $1.3 million related to the 2010 Acquisitions and other non-same store

revenue during 2010 as compared to 2009

Property management fee income increased to $2.8 million in 2010 from $56000 during 2009 an increase of $2.8 million This

increase is attributable to an increase in management fees related to the third party management business which included 93 facilities

as of December 31 2010 compared to eight facilities as of December 31 2009

Operating Expenses

Property operating expenses increased from $88.4 million in 2009 to $90.3 million in 2010 an increase of $1.9 million or 2%This increase is primarily attributable to $2.9 million of increased

expenses associated with non same-store properties and additional

costs incurred to support the growth of the third party management business offset by $1.1 million decrease in same-store expenses

primarily attributable to $0.6 million decrease in real estate tax expense in 2010 as compared to 2009

Depreciation and amortization decreased from $67.0 million in 2009 to $61.4 million in 2010 decrease of $5.6 million or 8%This decrease is primarily attributable to depreciation expense recognized in 2009 related to assets that became fully depreciated

during 2009 with no similaractivity on these fully depreciated assets in 2010

General and administrative expenses increased from $22.6 million in 2009 to $25.4 million in 2010 an increase of $2.8 million or

13% This increase is primarily attributable to additional personnel costs during 2010 incurred to support operational functions of the

Company as well as non-recurring contract related costs incurred in conjunction with amendments to employment agreements with

members of our senior management

REVENUESRental income

Other property related income

Property management fee income

Total revenues

OPERATING EXPENSES

Property operating expenses

NET OPERATING INCOME

Depreciation and amortization

General and administrative

Subtotal

Operating income

61428 66984

25406 22569

86834 89553

32634 25669

5556 -8%

2837 13%

2719 -3%

6965 27%

45

Other Income Expenses

Interest expense decreased from $45.3 million in 2009 to $37.8 million in 2010 decrease of $7.5 million or 17% Approximately

$3.9 million of the reduced interest expense related to $175 million of net mortgage loan repayments during the period from

January 2009 through December 31 2010 Interest expense also decreased by approximately $3.6 million as result of reduced

average outstanding credit facility borrowings and lower interest rates during 2010 as compared to 2009

Loan procurement amortization expense increased from $2.3 million in 2009 to $6.5 million in 2010 an increase of $4.2 million or

176% The increase is attributable to the amortization of additional costs incurred in relation to the amendment of the Prior Facility in

2010 and full year of amortization of costs related to the Prior Facility and the 17 secured financings entered into in 2009

Acquisition related costs increased to $0.8 million during 2010 with no comparable costs in 2009 as result of the acquisition of 12

self-storage facilities in addition to the acquisition of 85 management contracts from United Stor-All during 2010 compared to no

acquisition activity during 2009

Discontinued Operations

Gains on disposition of discontinued operations decreased from $14.1 million in the 2009 period to $1.8 million in the 2010 period

decrease of $12.3 million Gains during 2009 related to the sale of 20 assets during 2009 and gains during 2010 related to the sale of

16 assets during the year

Noncontrolling Interests in Subsidiaries

Noncontrolling interests in subsidiaries increased to $1.8 million in the 2010 period from $0.7 million in the 2009 period This

increase is primarily result of full year of activity related to the operations of our HART joint venture

Non-GAAP Financial Measures

NOl

We define net operating income which we refer to as NOT as total continuing revenues less continuing property operating

expenses NOT also can be calculated by adding back to net income loss interest expense on loans loan procurement amortization

expense loan procurement amortization expense early repayment of debt acquisition related costs equity in losses of real estate

ventures amounts attributable to noncontrolling interests other expense depreciation and amortization expense general and

administrative expense and deducting from net income income from discontinued operations gains on disposition of discontinued

operations other income and interest income NOI is not measure of performance calculated in accordance with GAAP

We use NOl as measure of operating performance at each of our facilities and for all of our facilities in the aggregate NOT should

not be considered as substitute for operating income net income cash flows provided by operating investing and financing

activities or other income statement or cash flow statement data prepared in accordance with GAAP

We believe NOT is useful to investors in evaluating our operating performance because

It is one of the primary measures used by our management and our facility managers to evaluate the economic productivity of

our facilities including our ability to lease our facilities increase pricing and occupancy and control our property operating

expenses

It is widely used in the real estate industry and the self-storage industry to measure the performance and value of real estate

assets without regard to various items included in net income that do not relate to or are not indicative of operating performance

such as depreciation and amortization which can vary depending upon accounting methods and the book value of assets and

We believe it helps our investors to meaningfully compare the results of our operating performance from period to period by

removing the impact of our capital structure primarily interest expense on our outstanding indebtedness and depreciation of our

basis in our assets from our operating results

There are material limitations to using measure such as NOI including the difficulty associated with comparing results among

more than one company and the inability to analyze certain significant items including depreciation and interest expense that directly

affect our net income We compensate for these limitations by considering the economic effect of the excluded expense items

independently as well as in connection with our analysis of net income NOI should be considered in addition to but not as

46

substitute for other measures of financial performance reported in accordance with GAAP such as total revenues operating income

and net income

FF0

Pursuant to the revised definition of Funds from Operations adopted by the Board of Governors of the National Association of Real

Estate Investment Trusts NAREIT we calculate Funds from Operations or FF0 by adjusting net income computed in

accordance with GAAP including non-recurring items for gains or losses from sales of properties impairments of depreciable

assets real estate related depreciation and amortization and after adjustment for unconsolidated partnerships and joint ventures FF0

is non-GAAP financial measure The use of FF0 combined with the required primary GAAP presentations has been fundamentally

beneficial in improving the understanding of operating results of REITs among the investing public and making comparisons of REIT

operating results more meaningful Management generally considers FF0 to be useful measure for reviewing our comparative

operating and financial performance because by excluding gains and losses related to sales of previously depreciated operating real

estate assets impairments of depreciable assets and excluding real estate asset depreciation and amortization which can vary amongowners of identical assets in similarcondition based on historical cost accounting and useful life estimates FF0 can help one

compare the operating performance of companys real estate between periods or as compared to different companies Our

computation of FF0 may not be comparable to FF0 reported by other REITs or real estate companies that do not define the term in

accordance with the current NAREIT definition or that interpret the current NAREIT definition differently

FF0 should not be considered as an alternative to net income determined in accordance with GAAP as an indication of our

performance FF0 does not represent cash generated from operating activities determined in accordance with GAAP and is not

measure of liquidity or an indicator of our ability to make cash distributions We believe that to further understand our performance

FF0 should be compared with our reported net income and considered in addition to cash flows in accordance with GAAP as

presented in our Consolidated Financial Statements

The following table presents reconciliation of net income to FF0 for theyear

ended December 31 2011 and 2010 in thousands

2011 2010

Net loss attributable to common shareholders 1616 7393

Add deductReal estate depreciation and amortization

Real property continuing operations 66587 59699Real property discontinued operations 848 3209

Companys share of unconsolidated real estate ventures 542

Noncontrolling interests share of consolidated real estate ventures 1731 2206Gains on sale of real estate 3903 1826Noncontrolling interests in the Operating Partnership 35 381

FF0 60762 51102

Weighted-average diluted shares and units outstanding 109085 99955

Cash Flows

Comparison of the Year Ended December 31 2011 to the Year Ended December 31 2010

comparison of cash flow related to operating investing and financing activities for the years ended December 31 2011 and 2010

is as follows

Year Ended December 31

Net cash flow provided by used in 2011 2010 Change

in thousands

Operating activities 84327 71517 12810

Investing activities 442100 44783 397317

Financingactivities 360951 123611 484562

47

Cash flows provided by operating activities for the years ended December 31 2011 and 2010 were $84.3 million and $71.5 million

respectively an increase of $12.8 million Our principal source of cash flows is from the operation of our properties Our increased

cash flow from operating activities is primarily attributable to our 2010 and 2011 acquisitions

Cash used in investing activities increased from $44.8 million in 2010 to S442.1 million in 2011 an increase of $397.3 million The

increase primarily relates to increased property acquisitions in 2011 Storage Deluxe Acquisition with apurchase price totaling $357.3

million and 11 other property acquisitions with purchase prices totaling $109.8 million compared to 2010 12 property acquisitions

with purchase price totaling $85.1 million

Cash provided by used in financing activities increased from $123.6 million in 2010 to $361.0 million in 2011 an increase of

$484.6 million The increase relates to the following increased common and preferred share issuances of $231.3 million in 2011as compared to 2010 primarily used to finance the Storage Deluxe Acquisition in November 2011 net increase in unsecured

term loans of $200.0 million that was used to repay $93 million of borrowings under the revolving credit facility related to the

financing of the Storage Deluxe Acquisition and net decrease in payments on mortgage loans and notes payable of $156.9

million offset by full repayment of revolving credit facility borrowings of $43 million during 2011 compared to prior year inflows of

$43 million and increased distributions of$l9.3 million in 2011 as compared to 2010

Comparison of the Year Ended December 31 2010 to the Year Ended December 31 2009

comparison of cash flow related to operating investing and financing activities for the years ended December 31 2010 and 2009

is as follows

Year Ended December 31

Net cash flow provided by used in 2010 2009 Change

in thousands

Operating activities 71517 62214 9303

Investing activities 44783 98852 143635Financing activities 123611 62042 61569

Cash flows provided by operating activities for theyears

ended December 31 2010 and 2009 were $71.5 million and $62.2 million

respectively an increase of $9.3 million The increase primarily relates to timing differences associated with $3.2 million increase

in accounts payable and accrued expense activity and $3.9 million decrease in restricted cash activity during 2010 as compared to

2009 and increased NOI levels during 2010 as compared to 2009

Cash used in provided by investing activities decreased from $98.9 million in 2009 to $44.8 million in 2010 decrease of

$143.6 million The decrease primarily relates to decreased property dispositions in 2010 aggregate proceeds of $37.3 million related

to 16 facilities compared to 2009 aggregate proceeds of $68.3 million related to 20 facilities net proceeds received from the

formation of YSI HART Limited Partnership in August 2009 of approximately $48.7 million with no similar transactions during

2010 as well as more acquisition activity in 2010 12 facilities acquired for an aggregate cost of $84.7 million relative to no

acquisitions during 2009 The decrease was offset by repayment of notes receivable of $20.1 million during 2010

Cash used in financing activities increased from $62.0 million in 2009 to $123.6 million in 2010 an increase of $61.6 million The

increase primarily relates to higher common share issuance activity in 2010 compared to 2009 proceeds of $170.9 million and $47.6

million respectively and increased distributions paid to shareholders and non-controlling interests of $5.9 million during 2010 as

compared to 2009 due to additional outstanding shares during 2010 offset by decreased net debt repayments of $54.8 million and loan

procurement costs of$12.6 million in 2010 as compared to 2009

Liquidity and Capital Resources

Liquidity Overview

Our cash flow from operations has historically been one of our primary sources of liquidity to fund debt service distributions and

capital expenditures We derive substantially all of our revenue from customers who lease space from us at our facilities and fees

earned from managing properties Therefore our ability to generate cash from operations is dependent on the rents that we are able to

charge and collect from our customers We believe that the facilities in which we invest self-storage facilities are less sensitive

than other real estate product types to near-term economic downturns However prolonged economic downturns will adversely affect

our cash flows from operations

48

In order to qualify as REIT for federal income tax purposes the Parent Company is required to distribute at least 90% of REIT

taxable income excluding capital gains to our shareholders on an annual basis or pay federal income tax The nature of our business

coupled with the requirement that the Parent Company distribute substantial portion of our income on an annual basis will cause us

to have substantial liquidity needs over both the short term and the long term

Our short-term liquidity needs consist primarily of funds necessary to pay operating expenses associated with our facilities

refinancing of certain mortgage indebtedness interest expense and scheduled principal payments on debt expected distributions to

limited partners and shareholders and recurring capital expenditures These funding requirements will vary from year to year in some

cases significantly We funded the $357.3 million cash portion of the Storage Deluxe Acquisition using approximately $277.3 million

in net proceeds from our recently completed public offerings of common and preferred shares and borrowings of approximately $93

million under our 2011 Credit Facility We expect recurring capital expenditures in the 2012 fiscal year to be approximately $7

million to $9 million In addition we expect capital improvements totaling approximately $8 million related to our store upgrade

SuperStore and rebranding initiatives through December 31 2012 Our currently scheduled principal payments on debt including

borrowings outstanding on the 2011 Credit Facility and Term Loan Facility are approximately $168.8 million in 2012

Our most restrictive debt covenants limit the amount of additional leverage we can add however we believe cash flow from

operations access to our at the market program and access to our 2011 Credit Facility are adequate to execute our current business

plan and remain in compliance with our debt covenants

Our liquidity needs beyond 2012 consist primarily of contractual obligations which include repayments of indebtedness at maturity

as well as potential discretionary expenditures such as non-recurring capital expenditures ii redevelopment of operating facilities

iii acquisitions of additional facilities and iv development of new facilities We will have to satisf our needs through either

additional borrowings including borrowings under the revolving portion of our 2011 Credit Facility sales of common or preferred

shares and/or cash generated through facility dispositions and joint venture transactions

Notwithstanding the discussion above we believe that as publicly traded REIT we will have access to multiple sources of capital

to fund long-term liquidity requirements including the incurrence of additional debt and the issuance of additional equity However

we cannot provide any assurance that this will be the case Our ability to incur additional debt will be dependent on number of

factors including our degree of leverage the value of our unencumbered assets and borrowing restrictions that may be imposed by

lenders In addition dislocation in the United States debt markets may significantly reduce the availability and increase the cost of

long-term debt capital including conventional mortgage financing and commercial mortgage-backed securities financing There can

be no assurance that such capital will be readily available in the future Our ability to access the equity capital markets will be

dependent on number of factors as well including general market conditions for REITs and market perceptions about us

As of December 31 2011 we had approximately $9.1 million in available cash and cash equivalents In addition we had

approximately $400 million of availability for borrowings under our 2011 Credit Facility

Bank Credit Facilities

On December 2009 we entered into three-year $450 million senior secured credit facility which we refer to as the Prior

Facility consisting of $200 million secured term loan and $250 million secured revolving credit facility The Prior Facility was

collateralized by mortgages on borrowing base properties as defined in the Prior Facility agreement The Prior Facility replaced

the prior three-year $450 million unsecured credit facility the 2006 Credit Facility which was entered into in November 2006and consisted of $200 million unsecured term loan and $250 million in unsecured revolving loans All borrowings under the 2006

Credit Facility were repaid in December 2009

On September 29 2010 we amended the Prior Facility The Prior Facility as amended consisted of $200 million unsecured term

loan and $250 million unsecured revolving credit facility and had an outstanding balance of $43 million as of December 31 2010

The Prior Facility as amended had three-year term expiring on December 2013 was unsecured and borrowings on the facility

incurred interest on borrowing spread determined by our leverage levels plus LIBOR

On June 20 2011 we entered into an unsecured Term Loan Agreement the Term Loan Facility which consisted of $100

million term loan with five-year maturity and $100 million term loan with seven-year maturity The Term Loan Facility permits

the Company to request additional advances of five-year or seven-year loans in minimum increments of $5 million provided that such

additional advances do not in the aggregate exceed $50 million We incurred costs of $2.1 million in connection with executing the

agreement and capitalized such costs as component of loan procurement costs net of amortization on the consolidated balance sheet

Interest rates on the Term Loan Facility range depending on the Companys leverage levels from 1.90% to 2.75% over LIBOR for

the five-year loan and from 2.05% to 2.85% over LIBOR for the seven-year loan and each loan has no LIBOR floor As of

49

December 31 2011 we had received two investment grade ratings and therefore pricing on the Term Loan Facility ranges from

1.45% to 2.10% over LIBOR for the five-year loan and from 1.60% to 2.25% over LIBOR for theseven-year loan

On December 2011 we entered into credit agreement comprised of $100 million unsecured term loan maturing in December

2014 $200 million unsecured term loan maturing in March 2017 and $300 million unsecured revolving facility maturing in

December 2015 which we refer to as the 2011 Credit Facility The 2011 Credit Facility replaces in its entirety our Prior Facility In

connection with obtaining the 2011 Credit Facility we paid additional deferred financing costs of $3.4 million and wrote off deferred

financing fees related to the Prior Facility of $6.1 million

Interest rates on borrowings under the 2011 Credit Facility depend on our unsecured debt credit rating At our current Baa3/BBB-

level amounts drawn under the revolving facility portion of the 2011 Credit Facility are priced at 1.80% over LIBOR with no LIBORfloor and amounts drawn under the term loan portion of the 2011 Credit Facility are priced at 1.75% over LIBOR with no LIBOR

floor

On December 31 2011 $200 million of unsecured term loan borrowings were outstanding under the Term Loan Facility $200

million of unsecured term loan borrowings were outstanding under the 2011 Credit Facility and $400 million was available for

borrowing under the 2011 Credit Facility We had interest rate swaps as of December 31 2011 that fix LIBOR on $200 million of

borrowings under the 2011 Credit Facility maturing in March 2017 at 1.34% In addition at December 31 2011 we had interest rate

swaps that fix LIBOR on both the five and seven-year term loans under the Term Loan Facility through their respective maturity

dates The interest rate swap agreements fix thirty day LIBOR over the terms of the five and seven-year term loans at 1.80% and

2.47% respectively We recognized loan procurement amortization expense early repayment of debt of $8.2 million related to the

write-off of unamortized loan procurement costs associated with the Prior Facility

As of December 31 2011 borrowings under the 2011 Credit Facility and Term Loan Facility had weighted average interest rate

of 3.57% and the effective interest rates on the five and seven-year term loans were 3.65% and 4.47% respectively after giving

consideration to the interest rate swaps described in Note

Our ability to borrow under the 2011 Credit Facility and Term Loan Facility is subject to our ongoing compliance with certain

financial covenants which include

Maximum total indebtedness to total asset value of 60.0% at any time

Minimum fixed charge coverage ratio of 1.501.00 and

Minimum tangible net worth of $821211200 plus 75% of net proceeds from equity issuances after June 30 2010

Further under the 2011 Credit Facility and Term Loan Facility we are restricted from paying distributions on our common shares

that would exceed an amount equal to the greater of 95% of our funds from operations and ii such amount as may be necessary to

maintain our REIT status

We are currently in compliance with all of our financial covenants and anticipate being in compliance with all of our financial

covenants through the terms of the 2011 Credit Facility and Term Loan Facility

Other Material Changes in Financial Position

December 31 Increase

2011 2010 decrease

in thousands

Selected Assets

Storage facilities net 1788720 1428491 360229

Investment in joint venture 15181 15181

Other assets net 43645 18576 25069

Selected Liabilities

Revolving credit facility 43000 43000Unecured term loan 400000 200000 200000

Mortgage loans and notes payable 358441 372457 14016Accounts payable accrued

expensesand other

liabilities 51025 36172 14853

50

Storage facilities net increased $360.2 million during 2011 primarily as result of the acquisition of 27 facilities for $467.1 million

and fixed asset additions offset by the disposition of 19 properties for $45.2 million during the same period Investment in joint

venture increased by $15.2 million due to the formation of the HSRE joint venture in September 2011 Other assets net increased

$25.1 million due to increased intangible assets of $25.1 million related to the 2011 Acquisitions

Our borrowing under the revolving portion of the 2011 Credit Facility decreased $43.0 million as result of additional borrowings

made during 2011 from the Term Loan Facility and the related paydown of the Prior Facility Unsecured term loan borrowing

increased by $200 million due to borrowings under the Term Loan Facility related to payments for the 2011 Acquisitions and the

repayment of multiple mortgages in 2011 Mortgage loans and notes payable decreased $14.0 million due to scheduled principal

payments and the repayment of several mortgages during the year Accounts payable accrued expenses and other liabilities increased

$14.9 million primarily due to an increase in derivative liabilities during 2011

Contractual Obligations

The following table summarizes our known contractual obligations as of December 31 2011 in thousands

Payments Due by Period

2017 and

Total 2012 2013 2014 2015 2016 thereafter

Mortgage loans and notes

payable 358055 168763 30816 64443 64598 7601 21834

Revolving credit facility and

unsecured term loans 400000 100000 100000 200000

Interest payments 122490 32038 25462 21897 16134 14430 12529

Ground leases and third

partyofficelease 43235 988 988 940 860 887 38572

Related party office leases 1473 475 499 499

Software and service contracts 2085 2085

927338 204349 57765 187779 81592 122918 272935

Amounts do not include unamortized discounts/premiums

Interest on variable rate debt calculated using the following rates The 2011 Credit Facility and Term Loan Facility had

weighted average interest rate of 3.57% and the effective interest rates on the five and seven-year term loans were 3.65% and

4.47% respectively

We expect that the contractual obligations owed in 2012 will be satisfied by combination of cash generated from operations and

from draws on the revolving portion of the 2011 Credit Facility

Off-Balance Sheet Arrangements

We do not have off-balance sheet arrangements financings or other relationships with other unconsolidated entities other than our

co-investment partnerships or other persons also known as variable interest entities not previously discussed

ITEM 7A QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Companys future income cash flows and fair values relevant to financial instruments depend upon prevailing interest rates

Market Risk

Our investment policy relating to cash and cash equivalents is to preserve principal and liquidity while maximizing the return

through investment of available funds

Effect of Changes in Interest Rates on our Outstanding Debt

Our interest rate risk objectives are to limit the impact of interest rate fluctuations on earnings and cash flows and to lower our

overall borrowing costs To achieve these objectives we manage our exposure to fluctuations in market interest rates for portion of

51

our borrowings through the use derivative financial instruments such as interest rate swaps or caps to mitigate our interest rate risk on

related financial instrument or to effectively lock the interest rate on portion of our variable rate debt The analysis below presents

the sensitivity of the market value of our financial instruments to selected changes in market rates Therange of changes chosen

reflects our view of changes which are reasonably possible over one-year period Market values are the present value of projected

future cash flows based on the market rates chosen

As of December 31 2011 our consolidated debt consisted of $758.4 million of outstanding mortgages and unsecured term loans that

are subject to fixed rates including variable rate debt that is effectively fixed through our use of interest rate swaps There were no

amounts outstanding subject to floating rates However to the extent that we borrow on the revolving credit facility we will then

have debt subject to variable rates Changes in interest rates have different impacts on the fixed and variable rate portions of our debt

portfolio change in interest rates on the fixed portion of the debt portfolio impacts the net financial instrument position but has no

impact on interest incurred or cash flows change in interest rates on the variable portion of the debt portfolio impacts the interest

incurred and cash flows but does not impact the net financial instrument position If market rates of interest increase by 1% the fair

value of our outstanding fixed-rate mortgage debt and unsecured term loans would decrease by approximately $23.4 million If

market rates of interest decrease by the fair value of our outstanding fixed-rate mortgage debt and unsecured term loans would

increase by approximately $23.4 million

ITEM FINANCIAL STA TEMENTS AND SUPPLEMENTARY DATA

Financial statements required by this item appear with an Index to Financial Statements and Schedules starting on page F- of this

report

ITEM CHANGES IN AND DISAGREEMENTS WITH CCOUNTANTS ON ACCOUNTING AND FINANCIALDISCLOSURE

None

ITEM 9A CONTROLS AND PROCED URES

Controls and Procedures Parent Company

Evaluation of Disclosure Controls and Procedures

As of the end of the period covered by this report the Parent Company carried out an evaluation under the supervision and with the

participation of its management including its chief executive officer and chief financial officer of the effectiveness of the design and

operation of its disclosure controls and procedures as defined in Rules l3a-15e under the Securities Exchange Act of 1934 as

amended the Exchange Act Based on that evaluation the Parent Companys chief executive officer and chief financial officer

have concluded that the Parent Companys disclosure controls and procedures are effective

Based on that evaluation the Parent Companys chief executive officer and chief financial officer have concluded that the Parent

Companys disclosure controls and procedures are designed at reasonable assurance level and are effective to provide reasonable

assurance that information required to be disclosed by the Parent Company in reports that it files or submit under the Exchange Act is

recorded processed summarized and reported within the time periods specified in SEC rules and forms and that such information is

accumulated and communicated to the Parent Companys management including its chief executive officer and chide financial

officer as appropriate to allow timely decisions regarding required disclosure

Changes in Internal Controls Over Financial Reporting

There has been no change in the Parent Companys internal control over financial reporting as defined in Rule 3a-l 5f under the

Exchange Act during its most recent fiscal quarter that has materially affected or is reasonably likely to materially affect its internal

control over financial reporting

Managements Report on Internal Control Over Financial Reporting

Managements report on internal control over financial reporting is set forth on page F-2 of this Annual Report on Form 10-K and

is incorporated herein by reference The effectiveness of the Parent Companys internal control over financial reporting as of

December 31 2011 has been audited by KPMG LLP an independent registered public accounting firm as stated in its report which is

included herein

52

Controls and Procedures Operating Partnership

Evaluation of Disclosure Controls and Procedures

As of the end of the period covered by this report the Operating Partnership carried out an evaluation under the supervision and

with the participation of its management including the Operating Partnerships chief executive officer and chief financial officer of

the effectiveness of the design and operation of the Operating Partnerships disclosure controls and procedures as defined in Rules

3a- 15e under the Exchange Act Based on that evaluation the Operating Partnerships chief executive officer and chief financial

officer have concluded that the Operating Partnerships disclosure controls and procedures are effective

Based on that evaluation the Operating Partnerships chief executive officer and chief financial officer have concluded that the

Operating Partnerships disclosure controls and procedures are designed at reasonable assurance level and are effective to provide

reasonable assurance that information required to be disclosed by the Operating Partnership in reports that it files or submits under the

Exchange Act is recorded processed summarized and reported within the time periods specified in SEC rules and forms and that

such information is accumulated and communicated to the Operating Partnerships management including the Operating

Partnerships chief executive officer and chief financial officer as appropriate to allow timely decisions regarding required

disclosure

Changes in Internal Controls Over Financial Reporting

There has been no change in the Operating Partnerships internal control over financial reporting as defined in Rule 13 a-i 5funder the Exchange Act during our most recent fiscal quarter that has materially affected or is reasonably likely to materially affect

the Operating Partnerships internal control over financial reporting

Managements Report on Internal Control Over Financial Reporting

Managements report on internal control over financial reporting is set forth on page F-2 of this Annual Report on Form 10-K and

is incorporated herein by reference The effectiveness of the Operating Partnerships internal control over financial reporting as of

December 31 2011 has been audited by KPMG LLP an independent registered public accounting firm as stated in its report which is

included herein

ITEM 9B OTHER INFORMATION

Not applicable

PART III

ITEM 10 TRUSTEES EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

We have adopted Code of Ethics for all of our employees officers and trustees including our principal executive officer and

principal financial officer which is available on our website at www.cubesmart.com We intend to disclose any amendment to or

waiver from provision of our Code of Ethics on our website within four business days following the date of the amendment or

waiver

The remaining information required by this item regarding trustees executive officers and corporate governanceis hereby

incorporated by reference to the material appearing in the Proxy Statement for the Annual Shareholders Meeting to be held in 2011

the Proxy Statement under the captions Proposal Election of Trustees Executive Officers Meetings and Committees of

the Board of Trustees and Shareholder Proposals and Nominations for the 2013 Annual Meeting The information required by this

item regarding compliance with Section 16a of the Exchange Act is hereby incorporated by reference to the material appearing in the

Parent Companys Proxy Statement under the caption Section 16a Beneficial Ownership Reporting Compliance

ITEM 11 EXECUTIVE COMPENSA HON

The information required by this item is hereby incorporated by reference to the material appearing in the Parent Companys Proxy

Statement under the captions Compensation Committee Report Meetings and Committees of the Board of Trustees

Compensation Committee Interlocks and Insider Participation Compensation Discussion and Analysis Executive

Compensation Potential Payments Upon Termination or Change in Control and Trustee Compensation

53

ITEM 12 SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANA GEMENT AND RELA TEDSHAREHOLDER MA TTERS

The following table sets forth certain information regarding our equity compensation plans as of December 31 2011

Plan Category

Equity compensation plans approved by

shareholders

Equity compensation plans not

approved by shareholders

Total

Number of securities to

be issued upon exercise

of outstanding options

warrants and rights

52557181

5255718

Weighted-average

exercise price of

outstanding options

warrants and rights

10.352

10.35

Number of securities remaining

available for future issuance under

equity compensation plans

excluding securities

reflected in columna

4356330

4356330

Excludes 666622 shares subject to outstanding restricted share unit awards

This number reflects the weighted-average exercise price of outstanding options and has been calculated exclusive

of outstanding restricted unit awards

The information regarding security ownership of certain beneficial owners and management required by this item is hereby

incorporated by reference to the material appearing in the Parent Companys Proxy Statement under the caption Security Ownership

of Management and Security Ownership of Beneficial Owners

ITEM 13 CERTAIN RELATIONSHIPS AND RELA TED TRANSACTIONS AND TRUSTEE INDEPENDENCE

The information required by this item is hereby incorporated by reference to the material appearing in the Parent Companys Proxy

Statement under the captions Corporate Governance- Independence of Trustees Policies and Procedures Regarding Review

Approval or Ratification of Transactions With Related Persons and Transactions With Related Persons

ITEM 14 PRINCIPAL ACCOUNTANT FEES AND SERVICES

The information required by this item is hereby incorporated by reference to the material appearing in the Parent Companys Proxy

Statement under the captions Audit Committee Matters Fees Paid to Our independent Registered Public Accounting Firm and

Audit Committee Pre-Approval Policies and Procedures

PART IV

ITEM 15 EXHIBITS AND FINANCIAL STA TEMENT SCHEDULES

Documents filed as part of this report

Financial Statements

The response to this portion of Item 15 is submitted as separate section of this report

Financial Statement Schedules

The response to this portion of Item 15 is submitted as separate section of this report

Exhibits

The list of exhibits filed with this report is set forth in response to Item 15b The required exhibit index has been filed with

the exhibits

Exhibits The following documents are filed as exhibits to this report

54

3.1 Articles of Amendment and Restatement of Declaration of Trust of U-Store-It Trust incorporated by reference to

Exhibit 3.1 to the Companys Current Report on Form 8-K filed on November 2004

3.2 Articles of Amendment of Declaration of Trust of CubeSmart dated September 14 2011 incorporated by reference to

Exhibit 3.1 to the Companys Current Report on Form 8-K filed on September 16 2011

33 Articles Supplementary to Declaration of Trust of CubeSmart classifying and designating CubeSmarts 7.75% Series

Cumulative Redeemable Preferred Shares of Beneficial Interest incorporated by reference to Exhibit 3.3 to

CubeSmarts Form 8-A filed on October 31 2011

Third Amended and Restated Bylaws of CubeSmart effective September 14 2011 incorporated by reference to

Exhibit 3.2 to the Companys Current Report on Form 8-K filed on September 16 2011

35 Certificate of Limited Partnership of U-Store-It L.P incorporated by reference to Exhibit 3.1 to CubeSmart L.P.s

Registration Statement on Form 10 filed on July 15 2011

3.6 Amendment No to Certificate of Limited Partnership of CubeSmart L.P dated September 14 2011 incorporated by

reference to Exhibit 3.3 to the Companys Current Report on Form 8-K filed on September 16 2011

37 Second Amended and Restated Agreement of Limited Partnership of U-Store-It L.P dated as of October 27 2004

incorporated by reference to Exhibit 10.1 to the Companys Current Report on Form 8-K filed on November 2004

3.8 Amendment No ito Second Amended and Restated Agreement of Limited Partnership of CubeSmart L.P dated as of

November 2011 incorporated by reference to Exhibit 3.4 to the Companys Current Report on Form 8-K filed on

September 16 2011

39 Amendment No to Second Amended and Restated Agreement of Limited Partnership of CubeSmart L.P dated as of

November 2011 incorporated by reference to Exhibit 3.2 to the Companys Current Report on Form 8-K filed on

November 2011

4.1 Form of Common Share Certificate incorporated by reference to Exhibit 4.1 to Amendment No to the Companys

Registration Statement on Form S-ll filed on October 202004 File No 333-1 17848

4.2 Form of Certificate for CubeSmarts 7.75% Series Cumulative Redeemable Preferred Shares of Beneficial Interest

incorporated by reference to Exhibit 4.1 to CubeSmarts Form 8-A filed on October 31 2011

43 Indenture dated as of September 16 2011 among CubeSmart L.P CubeSmart and U.S Bank National Association

incorporated by reference to Exhibit 4.5 to the Companys Registration Statement on Form S-3 filed on September 162011

10.1 Second Amended and Restated Agreement of Limited Partnership of U-Store-It L.P dated as of October 27 2004incorporated by reference to Exhibit 10.1 to the Companys Current Report on Form 8-K filed on November 2004

10.2 Amended and Restated Credit Agreement dated December 2009 by and among U-Store-It L.P U-Store-It Trust

Wells Fargo Securities LLC Bank of America Securities LLC Wachovia Bank National Association Bank of

America N.A Regions Bank SunTrust Bank and the financial institutions initially signatory thereto incorporated by

reference to Exhibit 10.1 to the Companys Current Report on Form 8-K filed on December 2009

10.3 Form of Guaranty incorporated by reference to Exhibit 10.1 to the Companys Current Report on Form 8-K filed on

December 2009

10.4 Form of Term Note incorporated by reference to Exhibit 10.1 to the Companys Current Report on Form 8-K filed on

December 2009

10.5 Form of Revolving Note incorporated by reference to Exhibit 10.1 to the Companys Current Report on Form 8-Kfiled on December 2009

10.6 Form of Swingline Note incorporated by reference to Exhibit 10.1 to the Companys Current Report on Form 8-K filed

on December 2009

55

10.7 Form of Security Interest regarding fixed rate mortgage loan between YSI XX LP and Transamerica Financial Life

Insurance Company incorporated by reference to Exhibit 10.2 to the Companys Current Report on Form 8-K filed on

November 2005

10.8 Secured Promissory Note dated November 2005 between YSI XX LP and Transamerica Financial Life Insurance

Company incorporated by reference to Exhibit 10.1 to the Companys Current Report on Form 8-K filed on

November 2005

10.9 Loan Agreement dated August 2005 by and between YASKY LLC and LaSalle Bank National Association

incorporated by reference to Exhibit 10.2 to the Companys Quarterly Report on Form 10-Q for the quarter ended

September 30 2005 filed on November 14 2005

10.10 Loan Agreement dated July 19 2005 by and between YSI VI LLC and Lehman Brothers Bank FSB incorporated by

reference to Exhibit 10.1 to the Companys Quarterly Report on Form 10-Q for the quarter ended September 30 2005filed on November 14 2005

10.11 Loan Agreement dated as of October 27 2004 by and between YSI LLC and Lehman Brothers Holdings Inc d/bla

Lehman Capital division of Lehman Brothers Holdings Inc incorporated by reference to Exhibit 10.2 to the

Companys Current Report on Form 8-K filed on November 2004

10.12 Loan Agreement dated as of October 27 2004 by and between YSI II LLC and Lehman Brothers Holdings Inc d/bla

Lehman Capital division of Lehman Brothers Holdings Inc incorporated by reference to Exhibit 10.3 to the

Companys Current Report on Form 8-K filed on November 2004

10.13 Standstill Agreement by and among U-Store-It Trust Robert Amsdell Barry Amsdell and Todd Amsdell

dated August 2007 incorporated by reference to Exhibit 10.3 to the Companys Current Report on Form 8-K filed

on August 2007

10.14 Settlement Agreement and Mutual Release by and among U-Store-It Trust U-Store-It L.P YSI Management LLC U-

Store-It Mini Warehouse Co U-Store-It Development LLC Dean Jernigan Kathleen Weigand Robert Amsdell

Barry Amsdell Todd Amsdell Kyle Amsdell Rising Tide Development LLC and Amsdell and Amsdell

dated August 2007 incorporated by reference to Exhibit 10.1 to the Companys Current Report on Form 8-K filed

on August 2007

10.15 Purchase and Sale Agreement by and between U-Store-It L.P and Rising Tide Development LLC dated August

2007 incorporated by reference to Exhibit 10.2 to the Companys Current Report on Form 8-K filed on August

2007

10.16 First Amendment to Lease by and between U-Store-It L.P and Amsdell and Amsdell dated August 2007 amending

Lease dated March 29 2005 incorporated by reference to Exhibit 10.4 to the Companys Current Report on Form 8-Kfiled on August 2007

10.17 First Amendment to Lease by and between U-Store-It L.P and Amsdell and Amsdell dated August 2007 amending

Lease dated December 2005 incorporated by reference to Exhibit 10.5 to the Companys Current Report on Form 8-

filed on August 2007

10.18 First Amendment to Lease by and between U-Store-It L.P and Amsdell and Amsdell dated August 2007 amending

Lease dated December 2005 incorporated by reference to Exhibit 10.6 to the Companys Current Report on Form 8-

filed on August 2007

10.19 First Amendment to Lease by and between U-Store-It L.P and Amsdell and Amsdell dated August 2007 amending

Lease dated December 2005 incorporated by reference to Exhibit 10.7 to the Companys Current Report on Form 8-

filed on August 2007

10.20 First Amendment to Lease by and between U-Store-It L.P and Amsdell and Amsdell dated August 2007 amending

Lease dated December 2005 incorporated by reference to Exhibit 10.8 to the Companys Current Report on Form 8-

filed on August 2007

56

10.21 Lease dated March 29 2005 by and between Amsdell and Amsdell and U-Store-It L.P incorporated by reference to

Exhibit 10.41 to the Companys Annual Report on Form 10-K for the year ended December 31 2004 filed on

March 31 2005

10.22 Lease dated June 29 2005 by and between Amsdell and Amsdell and U-Store-It L.P incorporated by reference to

Exhibit 10.2 to the Companys Quarterly Report on Form 10-Q for the quarter ended June 30 2005 filed on August 122005

10.23 Lease dated June 29 2005 by and between Amsdell and Amsdell and U-Store-It L.P incorporated by reference to

Exhibit 10.3 to the Companys Quarterly Report on Form 10-Q for the quarter ended June 30 2005 filed on August 122005

10.24 Option Termination Agreement by and between U-Store-It L.P and Rising Tide Development LLC dated August

2007 incorporated by reference to Exhibit 10.9 to the Companys Current Report on Form 8-K filed on August

2007

10.25 Property Management Termination Agreement by and among U-Store-It Trust YSI Management LLC and Rising

Tide Development LLC dated August 2007 incorporated by reference to Exhibit 10.10 to the Companys Current

Report on Form 8-K filed on August 2007

10.26 Marketing and Ancillary Services Termination Agreement by and among U-Store-It Trust U-Store-It Mini Warehouse

Co and Rising Tide Development LLC dated August 2007 incorporated by reference to Exhibit 10.11 to the

Companys Current Report on Form 8-K filed on August 2007

0.27t Amended and Restated Executive Employment Agreement dated June 29 2010 by and between U-Store-It Trust and

Dean Jernigan incorporated by reference to Exhibit 10.1 to the Companys Current Report on Form 8-K filed on

July 2010

0.28t Amended and Restated Executive Employment Agreement dated January 24 2011 by and between U-Store-It Trust

and Christopher Man incorporated by reference to Exhibit 10.2 to the Companys Current Report on Form 8-K filed

on January 27 2011

10.29t Amended and Restated Executive Employment Agreement dated June 29 2010 by and between U-Store-It Trust and

Timothy Martin incorporated by reference to Exhibit 10.2 to the Companys Current Report on Form 8-K filed on

July 2010

10.30t Indemnification Agreement dated as of January 25 2008 by and among U-Store-It Trust U-Store-It L.P and Daniel

Hurwitz incorporated by reference to Exhibit 10.49 to the Companys Annual Report on Form 10-K for the year

ended December 31 2007 filed on February 29 2008

10.3 1t Indemnification Agreement dated as of March 22 2007 by and among U-Store-It Trust U-Store-It L.P and Marianne

Keler incorporated by reference to Exhibit 10.5 to the Companys Quarterly Report on Form 10-Q for the quarter

ended March 31 2007 filed on May 10 2007

10.32t Indemnification Agreement dated as of December 11 2006 by and among U-Store-It Trust U-Store-It L.P and

Timothy Martin incorporated by reference to Exhibit 10.47 to the Companys Annual Report on Form 10-K for the

year ended December 31 2006 filed on March 16 2007

l0.33t Indenmification Agreement dated June 2006 by and among U-Store-It Trust U-Store-It L.P and Christopher

Man incorporated by reference to Exhibit 10.2 to the Companys Quarterly Report on Form 10-Q for the quarter ended

June 30 2006 filed on August 2006

l0.34t Indemnification Agreement dated as of April 24 2006 by and among U-Store-It Trust U-Store-It L.P and Dean

Jemigan incorporated by reference to Exhibit 10.2 to the Companys Current Report on Form 8-K filed on April 242006

10.3 Indemnification Agreement dated as of October 27 2004 by and among U-Store-It Trust U-Store-It L.P and Robert

Amsdell incorporated by reference to Exhibit 10.12 to the Companys Current Report on Form 8-K filed on

November 2004

57

10.361 Indemnification Agreement dated as of October 27 2004 by and among U-Store-It Trust U-Store-It L.P and Barry

Amsdell incorporated by reference to Exhibit 10.14 to the Companys Current Report on Form 8-K filed on

November 2004

10.371 Indenmification Agreement dated as of October 27 2004 by and among U-Store-It Trust U-Store-It L.P and Todd

Amsdell incorporated by reference to Exhibit 10.15 to the Companys Current Report on Form 8-K filed on

November 2004

10.381 Indemnification Agreement dated as of October 27 2004 by and among U-Store-It Trust U-Store-It L.P and John

Dannemiller incorporated by reference to Exhibit 10.17 to the Companys Current Report on Form 8-K filed on

November 2004

10.391 Indemnification Agreement dated as of October 27 2004 by and among U-Store-It Trust U-Store-It L.P and Thomas

Commes incorporated by reference to Exhibit 10.18 to the Companys Current Report on Form 8-K filed on

November 2004

0.40t Indemnification Agreement dated as of October 27 2004 by and among U-Store-It Trust U-Store-It L.P and David

LaRue incorporated by reference to Exhibit 10.19 to the Companys Current Report on Form 8-K filed on

November 2004

10.411 Indenmification Agreement dated as of October 27 2004 by and among U-Store-It Trust U-Store-It L.P and Harold

Hailer incorporated by reference to Exhibit 10.20 to the Companys Current Report on Form 8-K filed on

November 2004

10.421 Indemnification Agreement dated as of October 27 2004 by and among U-Store-It Trust U-Store-It L.P and William

Diefenderfer III incorporated by reference to Exhibit 10.21 to the Companys Current Report on Form 8-K filed on

November 2004

10.431 Indemnification Agreement dated as of November 2009 by and among U-Store-It Trust U-Store-It L.P and John

Remondi incorporated by reference to Exhibit 10.43 to the Companys Annual Report on Form 10-K for the yearended

December 31 2009 filed on March 2010

10.441 Amended and Restated Noncompetition Agreement dated as of June 29 2010 by and between U-Store-It Trust and

Timothy Martin incorporated by reference to Exhibit 10.4 to the Companys Current Report on Form 8-K filed on

July 2010

10.451 Amended and Restated Noncompetition Agreement dated as of January 24 2011 by and between U-Store-It Trust and

Christopher Man incorporated by reference to Exhibit 10.3 to the Companys Current Report on Form 8-K filed on

January 27 2011

10.461 Amended and Restated Noncompetition Agreement dated as of June 29 2010 by and between U-Store-It Trust and

Dean Jernigan incorporated by reference to Exhibit 10.3 to the Companys Current Report on Form 8-K filed on

July 2010

10.471 Schedule of Compensation for Non-Employee Trustees of U-Store-It Trust effective May 2007 incorporated by

reference to Exhibit 10.11 to the Companys Quarterly Report on Form l0-Q for the quarter ended March 31 2007filed on May 10 2007

10.481 Nonqualified Share Option Agreement dated as of June 2006 by and between U-Store-It Trust and Christopher

Man incorporated by reference to Exhibit 10.4 to the Companys Quarterly Report on Form 10-Q for the quarter ended

June 30 2006 filed on August 2006

10.491 Nonqualified Share Option Agreement dated as of April 19 2006 by and between U-Store-It Trust and Dean Jernigan

incorporated by reference to Exhibit 10.4 to the Companys Current Report on Form 8-K filed on April 24 2006

10.501 Form of Restricted Share Agreement for Non-Employee Trustees under the U-Store-It Trust 2007 Equity Incentive

Plan incorporated by reference to Exhibit 10.83 to the Companys Annual Report on Form 10-K for the year ended

December 31 2007 flied on February 29 2008

58

10.5 lt Form of Restricted Share Agreement for Non-Employee Trustees under the U-Store-It Trust 2004 Equity Incentive

Plan incorporated by reference to Exhibit 10.12 to the Companys Quarterly Report on Form 0-Q for the quarter

ended March 31 2007 filed on May 10 2007

0.52 Form of Nonqualified Share Option Agreement under the U-Store-It Trust 2007 Equity Incentive Plan incorporated by

reference to Exhibit 10.1 to the Companys Current Report on Form 8-K filed on January 25 2008

0.531 Form of Nonqualified Share Option Agreement under the U-Store-It Trust 2004 Equity Incentive Plan incorporated by

reference to Exhibit 10.2 to the Companys Quarterly Report on Form 10-Q for the quarter ended March 31 2007 filed

on May 10 2007

0.54 Form of Performance-Vested Restricted Share Agreement under the U-Store-It Trust 2007 Equity Incentive Plan

incorporated by reference to Exhibit 10.3 to the Companys Current Report on Form 8-K filed on January 25 2008

10.55j Form of Performance-Vested Restricted Share Agreement under the U-Store-It Trust 2004 Equity Incentive Plan

incorporated by reference to Exhibit 10.3 to the Companys Quarterly Report on Form 10-Q for the quarter ended

March 31 2007 filed on May 10 2007

0.56t Form of Restricted Share Agreement under the U-Store-It Trust 2007 Equity Incentive Plan incorporated by reference

to Exhibit 10.2 to the Companys Current Report on Form 8-K filed on January 25 2008

0.57t Form of Restricted Share Agreement under the U-Store-It Trust 2004 Equity Incentive Plan incorporated by reference

to Exhibit 10.4 to the Companys Quarterly Report on Form 10-Q for the quarter ended March 31 2007 filed on

May 10 2007

10.58 U-Store-It Trust Trustees Deferred Compensation Plan amended and restated effective January 2009 incorporated

by reference to Exhibit 10.78 to the Companys Annual Report on Form 10-K for the year ended December 31 2008filed on March 2009

0.59t U-Store-It Trust Executive Deferred Compensation Plan amended and restated effective January 2009 incorporated

by reference to Exhibit 10.79 to the Companys Annual Report on Form 10-K for the year ended December 31 2008filed on March 2009

l0.60t U-Store-It Trust Deferred Trustees Plan effective as of May 31 2005 incorporated by reference to Exhibit 10.1 to the

Companys Current Report on Form 8-K filed on June 2005

lO.61j Amended and Restated U-Store It Trust 2007 Equity Incentive Plan effective June 2010 incorporated by reference to

Exhibit 10.1 to the Companys Current Report on Form 8-K filed on June 2010

l0.62t 2004 Equity Incentive Plan of U-Store-It Trust effective as of October 19 2004 incorporated by reference to

Exhibit 10.6 to the Companys Current Report on Form 8- filed on November 2004

lO.63t Indemnification Agreement dated as of February 26 2009 by and among U-Store-It Trust U-Store-It L.P and Jeffrey

Foster incorporated by reference to Exhibit 10.83 to the Companys Annual Report on Form 10-K for the year ended

December 31 2008 filed on March 2009

10.64t Severance and General Release Agreement dated February 10 2009 by and between U-Store-It Trust and Kathleen

Weigand incorporated by reference to Exhibit 10.84 to the Companys Annual Report on Form 10-K for the year ended

December 31 2008 filed on March 2009

10.65 Severance and General Release Agreement dated December 31 2008 by and between U-Store-It Trust and Steve

Nichols incorporated by reference to Exhibit 10.85 to the Companys Annual Report on Form 10-K for the year ended

December 31 2008 filed on March 2009

10.66 Contribution Agreement dated August 2009 by and between YSI Venture LP LLC and HART -YSI Investor LP

LLC incorporated by reference to Exhibit 99.1 to the Companys Current Report on Form 8-K filed on August

2009

59

10.67 First Amendment to Contribution Agreement dated August 13 2009 by and between YSI Venture LP LLC and HARTYSI Investor LP LLC incorporated by reference to Exhibit 10.2 to the Companys Current Report on Form 8-K filed

on August 14 2009

10.68 Amended and Restated Limited Partnership Agreement of YSI HART LIMITED PARTNERSHIP dated August 13

2009 incorporated by reference to Exhibit 10.1 to the Companys Current Report on Form 8-K filed on August 142009

10.69 Sales Agreement dated April 2009 among the U-Store-It Trust U-Store-It L.P and Cantor Fitzgerald Coincorporated by reference to Exhibit 1.1 to the Companys Current Report on Form 8-K filed on April 2009

10.70t Letter Agreement dated January 2009 between U-Store-It Trust and Jeffrey Foster incorporated by reference to

Exhibit 10.70 to the Companys Annual Report on Form 10-K for theyear ended December 31 2009 filed on March

2010

10.71t Indemnification Agreement dated as of February 23 2010 by and among U-Store-It Trust U-Store-It L.P and Piero

Bussani incorporated by reference to Exhibit 10.71 to the Companys Annual Report on Form 10-K for the year ended

December 31 2009 filed on March 2010

10.72 Employment letter Agreement dated July 13 2010 by and between U-Store-It Trust and Robert Blatz incorporated

by reference to Exhibit 10.1 to the Companys Current Report on Form 8-K filed on July 29 2010

10.73 Second Amended and Restated Credit Agreement dated as of September 29 2010 by and among U-Store-It L.P U-

Store-It Trust Wells Fargo Securities LLC and Banc of America Securities LLC incorporated by reference to

Exhibit 10.1 to the Companys Current Report on Form 8-K filed on October 2010

10.74 Amendment No ito Sales Agreement dated January 26 2011 by and among U-Store-It Trust U-Store It L.P and

Cantor Fitzgerald Co incorporated by reference to Exhibit 10.1 to the Companys Current Report on Form 8-K filed

January27 2011

10.75 Amended and Restated Executive Employment Agreement dated January 24 2011 by and among U-Store-It Trust and

Christopher Marr incorporated by reference to Exhibit 10.2 to the Companys Current Report on Form 8-K filed

January 27 2011

0.76t Amended and Restated Non-Competition Agreement dated January 24 2011 by and among U-Store-It Trust and

Christopher Marr incorporated by reference to Exhibit 10.3 to the Companys Current Report on Form 8-K filed

January 27 2011

lO.77t Indemnification Agreement dated as of January 31 2011 by and among U-Store-It Trust U-Store-It L.P and Jeffrey

Rogatz incorporated by reference to Exhibit 10.1 to the Companys Current Report on Form 8-K filed on

February 12011

lO.78t Amended and Restated Employment Letter Agreement dated April 2011 by and between U-Store-It Trust and

Jeffrey Foster incorporated by reference to Exhibit 10.1 to the Companys Current Report on Form 8-K filed on

April 2011

10.79 Term Loan Agreement dated as of June 20 2011 by and among U-Store-It L.P as Borrower U-Store-It Trust and

Wells Fargo Securities LLC and PNC Capital Markets LLC as joint lead arrangers and joint bookrunriers incorporated

by reference to Exhibit 10.1 to the Companys Current Report on Form 8-K filed on June 23 2011

10.80 Amendment No to the Sales Agreement dated September 16 2011 among CubeSmart CubeSmart L.P and Cantor

Fitzgerald Co incorporated by reference to Exhibit 10.1 to the Companys Current Report on Form 8-K filed on

September 16 2011

10.81 Agreement for Purchase Sale dated as of October 24 2011 by and between CubeSmart LP and 200 East 135th

Street LLC 1880 Bartow Avenue LLC 255 Exterior St LLC 1376 Cromwell LLC 175th Street DE LLC Boston Rd

LLC Bronx River LLC Bruckner Blvd LLC 1980 White Plains Road 552 Van Buren LLC 481 Grand LLC 2047

Pitkin LLC Sheffield Ave LLC Cropsey Ave LLC 9826 Jamaica Ave LLC 179 Jamaica Avenue Realty LLC 714

Markley St LLC Yorktown Heights Storage LLC Marbiedale Rd LLC New Rochelle Storage Partners L.L.C

60

Wilton Storage Partners L.L.C and Shelton Storage LLC incorporated by reference to Exhibit 10.1 to the CompanysCurrent Report on Form 8-K filed on October 24 2011

10.82 Registration Rights Agreement dated as of October 24 2011 by and between CubeSmart and Wells Fargo Investment

Holdings LLC incorporated by reference to Exhibit 10.2 to the Companys Current Report on Form 8-K filed on

October 24 2011

10.83 Waiver of Ownership Limitation incorporated by reference to Exhibit 10.3 to the Companys Current Report on

Form 8-K filed on October 24 2011

10.84 Commitment Letter for $100 million Senior Unsecured Term Loan Facility dated as of October 24 2011 incorporated

by reference to Exhibit 10.4 to the Companys Current Report on Form 8-K filed on October 24 2011

10.85 Purchase Agreement for Series Cumulative Redeemable Preferred Shares of Beneficial Interest dated October 24

2011 between CubeSmart and Wells Fargo Investment Holdings LLC incorporated by reference to Exhibit 10.1 to the

Companys Current Report on Form 8-K filed on October 31 2011

10.86 Credit Agreement dated as of December 2011 by and among CubeSmart L.P CubeSmart Wells Fargo Securities

LLC and Merrill Lynch Pierce Fenner Smith Incorporated as Revolver and Tranche joint lead arrangers and joint

bookrunners and Wells Fargo Securities LLC as Tranche sole leadarranger

and sole bookrunner incorporated by

reference to Exhibit 10.1 to the Companys Current Report on Form 8-K filed on December 14 2011

10 87t Form of Restricted Share Agreement under the CubeSmart 2007 Equity Incentive Plan

l0.88t Form of Non-Qualified Share Option Agreement under the CubeSmart 2007 Equity Incentive Plan

12.1 Statement regarding Computation of Ratios of CubeSmart

12.2 Statement regarding Computation of Ratios of CubeSmart L.P

21.1 List of Subsidiaries

23.1 Consent of KPMG LLP relating to financial statements of CubeSmart

23.2 Consent of KPMG LLP relating to financial statements of CubeSmart L.P

31.1 Certification of Chief Executive Officer of CubeSmart required by Rule 13a-14a/15d-14a under the Exchange Actas adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2 Certification of Chief Financial Officer of CubeSmart required by Rule 13a-14a/15d-14a under the Exchange Act as

adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.3 Certification of ChiefExecutive Officer of CubeSmart L.P required by Rule l3a-l4a/15d-14a under the Exchange

Act as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.4 Certification of Chief Financial Officer of CubeSmart L.P required by Rule 13a-14a/15d-l4a under the Exchange

Act as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1 Certification of Chief Executive Officer and Chief Financial Officer of CubeSmart pursuant to 18 U.S.C Section 1350

as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

32.2 Certification of Chief Executive Officer and ChiefFinancial Officer of CubeSmart L.P pursuant to 18 U.S.C

Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

99.1 Material Tax Considerations

101 The following CubeSmart and CubeSmart L.P financial information for the year ended December 31 2011 formatted

in XBRL eXtensible Business Reporting Language the Consolidated Balance Sheets ii the Consolidated

Statements of Operations iiithe Consolidated Statement of Equity iv the Consolidated Statements of Cash Flows

61

and Notes to Consolidated Financial Statements detailed tagged and filed herewith

Incorporated herein by reference as above indicated

Denotes management contract or compensatory plan contract or arrangement

62

SIGNATURES

Pursuant to the requirements of Section 13 or 15d of the Securities Exchange Act of 1934 the Registrant has duly caused this report

to be signed on its behalf by the undersigned thereunto duly authorized

CUBESMART

By Is Timothy Martin

Timothy Martin

Chief Financial Officer

Date February 29 2012

Pursuant to the requirements of the Securities Exchange Act of 1934 this report has been signed below by the following persons on

behalf of the Registrant and in the capacities and on the dates indicated

Signature Title Date

Is William Diefenderfer III Chairman of the Board of Trustees February 29 2012

William Diefenderfer III

Is Dean Jemigan Chief Executive Officer and Trustee February 29 2012

Dean Jernigan Principal Executive Officer

Is Timothy Martin Chief Financial Officer February 29 2012

Timothy Martin Principal Financial and Accounting Officer

Is Piero Bussani Trustee February 29 2012

Piero Bussani

Is Marianne Keler Trustee February 29 2012

Marianne Keler

Is David LaRue Trustee February 29 2012

David LaRue

Is John Remondi Trustee February 29 2012

John Remondi

Is Jeffrey Rogatz Trustee February 29 2012

Jeffrey Rogatz

63

FINANCIAL STATEMENTSINDEX TO THE CONSOLIDATED FINANCIAL STATEMENTS

Page No

Consolidated Financial Statements of CUBESMART and CUBESMART L.P The Company

Managements Report on CubeSmart Internal Control Over Financial Reporting F-2

Reports of Independent Registered Public Accounting Firm F-3

Cube Smart and Subsidiaries Consolidated Balance Sheets as of December 31 2011 and 2010 F-7

Cube Smart and Subsidiaries Consolidated Statements of Operations for the years ended December 31 2011 2010

and 2009 F-8

CubeSmart and Subsidiaries Consolidated Statements of Equity for the years ended December 31 2011 2010 and 2009...

F-9

Cube Smart and Subsidiaries Consolidated Statements of Cash Flows for the years ended December 31 2011 2010

and 2009 F-b

CubeSmart L.P and Subsidiaries Consolidated Balance Sheets as of December 31 2011 and 2010 F-li

CubeSmart L.P and Subsidiaries Consolidated Statements of Operations for the years ended December 31 2011

2010 and 2009 F-12

CubeSmart L.P and Subsidiaries Consolidated Statements of Capital for the years ended December 31 2011 2010

and 2009 F-13

CubeSmart L.P and Subsidiaries Consolidated Statements of Cash Flows for the years ended December 31 2011

2010 and 2009 F-14

Notes to Consolidated Financial Statements F- 15

F-i

MANAGEMENTS REPORT ON CUBESMART INTERNAL CONTROL OVER FINANCIAL REPORTING

Management of CubeSmart and CubeSmart L.P the Company is responsible for establishing and maintaining adequate internal

control over financial reporting as defined in Rules 13a-15f and 15d-15f under the Exchange Act Under Section 404 of the

Sarbanes-Oxley Act of 2002 the Companys management is required to assess the effectiveness of the Companys internal control

over financial reporting as of the end of each fiscal year and report on the basis of that assessment whether the Companys internal

control over financial reporting is effective

The Companys internal control over financial reporting is process designed to provide reasonable assurance regarding the

reliability of financial reporting and the preparation of financial statements for external purposesin accordance with U.S generally

accepted accounting principles The Companys internal control over financial reporting includes those policies and procedures that

pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and the

disposition of the assets of the Company

provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in

accordance with U.S generally accepted accounting principles and that the receipts and expenditures of the Company are

being made only in accordance with the authorization of the Companys management and its Board of Trustees and

provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition use or disposition of the

Companys assets that could have material effect on the financial statements

There are inherent limitations in the effectiveness of any system of internal control including the possibility of human error and the

circumvention or overriding of controls Accordingly even an effective internal control system can provide only reasonable assurance

with respect to financial statement preparation Further because of changes in conditions the effectiveness of an internal control

system may vary over time

Under the supervision and with the participation of the Companys management including the principal executive officer and

principal financial officer we conducted review evaluation and assessment of the effectiveness of our internal control over financial

reporting as of December 31 2011 based upon the Committee of Sponsoring Organizations of the Treadway Commission COSOcriteria In performing its assessment of the effectiveness of internal control over financial reporting management has concluded that

as of December 31 2011 our internal control over financial reporting was effective based on the COSO framework

The effectiveness of our internal control over financial reporting as of December 31 2011 has been audited by KPMG LLP an

independent registered public accounting firm as stated in their report thatappears

herein

February 29 2012

F-2

Report of Independent Registered Public Accounting Firm

The Board of Trustees and Shareholders of CubeSmart

We have audited the accompanying consolidated balance sheets of CubeSmart as of December 31 2011 and 2010 and the related

consolidated statements of operations equity and cash flows for each of the years in the three-year period ended December 31 2011

In comiection with our audit of the consolidated financial statements we have also audited the financial statement schedule as listed in

the accompanying index These consolidated financial statements and financial statement schedule are the responsibility of

CubeSmarts management Our responsibility is to express an opinion on these consolidated financial statements and financial

statement schedule based on our audits

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board United States Those

standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of

material misstatement An audit includes examining on test basis evidence supporting the amounts and disclosures in the financial

statements An audit also includes assessing the accounting principles used and significant estimates made by management as well as

evaluating the overall financial statement presentation We believe that our audits provide reasonable basis for our opinion

In our opinion the consolidated financial statements referred to above present fairly in all material respects the financial position of

Cube Smart as of December 31 2011 and 2010 and the results of their operations and their cash flows for each of the years in the

three-year period ended December 31 2011 in conformity with U.S generally accepted accounting principles Also in our opinion

the related financial statement schedule when considered in relation to the basic consolidated fmancial statements taken as whole

presents fairly in all material respects the information set forth therein

We have also audited in accordance with the standards of the Public Company Accounting Oversight Board United States

CubeSmarts internal control over financial reporting as of December 31 2011 based on criteria established in Internal Control

Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission COSO and our report

dated February 29 2012 expressed an unqualified opinion on the effectiveness of the Companys internal control over financial

reporting

Is KPMG LLP

Philadelphia Pennsylvania

February 29 2012

F-3

Report of Independent Registered Public Accounting Firm

The Partners of CubeSmart L.P

We have audited the accompanying consolidated balance sheets of CubeSmart L.P as of December 31 2011 and 2010 and the

related consolidated statements of operations capital and cash flows for each of the years in the three-year period ended

December 31 2011 In connection with our audit of the consolidated financial statements we have also audited the financial statement

schedule as listed in the accompanying index These consolidated financial statements and financial statement schedule are the

responsibility of CubeSmart L.P.s management Our responsibility is to express an opinion on these consolidated financial

statements and financial statement schedule based on our audits

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board United States Those

standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of

material misstatement An audit includes examining on test basis evidence supporting the amounts and disclosures in the financial

statements An audit also includes assessing the accounting principles used and significant estimates made by management as well as

evaluating the overall financial statement presentation We believe that our audits provide reasonable basis for our opinion

In our opinion the consolidated financial statements referred to above present fairly in all material respects the financial position of

CubeSmart L.P as of December 31 2011 and 2010 and the results of their operations and their cash flows for each of the years in the

three-year period ended December 31 2011 in conformity with U.S generally accepted accounting principles Also in our opinion

the related financial statement schedule when considered in relation to the basic consolidated financial statements taken as whole

presents fairly in all material respects the information set forth therein

We have also audited in accordance with the standards of the Public Company Accounting Oversight Board United States

Cube Smart L.P internal control over financial reporting as of December 31 2011 based on criteria established in Internal Control

Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission COSO and our report

dated February 29 2012 expressed an unqualified opinion on the effectiveness of the Companys internal control over financial

reporting

Is KPMG LLP

Philadelphia Pennsylvania

February 29 2012

F-4

Report of Independent Registered Public Accounting Firm

The Board of Trustees and Shareholders of CubeSmart

We have audited CubeSmart internal control over financial reporting as of December 31 2011 based on criteria established in

Internal Control Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission

COSO CubeSmarts management is responsible for maintaining effective internal control over financial reporting and for its

assessment of the effectiveness of internal control over financial reporting included in Managements Report on CubeSmart Internal

Control Over Financial Reporting Our responsibility is to express an opinion on the Companys internal control over financial

reporting based on our audit

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board United States Those

standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over

financial reporting was maintained in all material respects Our audit included obtaining an understanding of internal control over

financial reporting assessing the risk that material weakness exists and testing and evaluating the design and operating effectiveness

of internal control based on the assessed risk Our audit also included performing such other procedures as we considered necessary in

the circumstances We believe that our audit provides reasonable basis for our opinion

companys internal control over financial reporting is process designed to provide reasonable assurance regarding the reliability of

financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting

principles companys internal control over financial reporting includes those policies and procedures that pertain to the

maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the

company provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in

accordance with generally accepted accounting principles and that receipts and expenditures of the company are being made only in

accordance with authorizations of management and directors of the company and provide reasonable assurance regarding

prevention or timely detection of unauthorized acquisition use or disposition of the companys assets that could have material effect

on the financial statements

Because of its inherent limitations internal control over financial reporting may not prevent or detect misstatements Also projections

of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in

conditions or that the degree of compliance with the policies or procedures may deteriorate

In our opinion CubeSmart maintained in all material respects effective internal control over financial reporting as of December 31

2011 based on criteria established in Internal Control Integrated Framework issued by the Committee of Sponsoring Organizations

of the Treadway Commission

We also have audited in accordance with the standards of the Public Company Accounting Oversight Board United States the

consolidated balance sheets of CubeSmart as of December 31 2011 and 2010 and the related consolidated statements of operations

equity and cash flows for each of the years in the three-year period ended December 31 2011 and our report dated February 29 2012

expressed an unqualified opinion on those consolidated financial statements

Is KPMG LLP

Philadelphia Pennsylvania

February 29 2012

F-5

Report of Independent Registered Public Accounting Firm

The Partners of CubeSmart L.P

We have audited CubeSmart L.Ps internal control over financial reporting as of December 31 2011 based on criteria established in

Internal Control Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission

COSO CubeSmart L.P management is responsible for maintaining effective internal control over financial reporting and for its

assessment of the effectiveness of internal control over financial reporting included in Managements Report on CubeSmart Internal

Control Over Financial Reporting Our responsibility is to express an opinion on the Companys internal control over financial

reporting based on our audit

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board United States Those

standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over

financial reporting was maintained in all material respects Our audit included obtaining an understanding of internal control over

financial reporting assessing the risk that material weakness exists and testing and evaluating the design and operating effectiveness

of internal control based on the assessed risk Our audit also included performing such other procedures as we considered necessary in

the circumstances We believe that our audit provides reasonable basis for our opinion

companys internal control over financial reporting isprocess designed to provide reasonable assurance regarding the reliability of

financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting

principles companys internal control over financial reporting includes those policies and procedures that pertain to the

maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the

company provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in

accordance with generally accepted accounting principles and that receipts and expenditures of the company are being made only in

accordance with authorizations of management and directors of the company and provide reasonable assurance regarding

prevention or timely detection of unauthorized acquisition use or disposition of the companys assets that could have material effect

on the financial statements

Because of its inherent limitations internal control over financial reporting may not prevent or detect misstatements Also projections

of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in

conditions or that the degree of compliance with the policies or procedures may deteriorate

In our opinion CubeSmart L.P maintained in all material respects effective internal control over financial reporting as of

December 31 2011 based on criteria established in Internal Control Integrated Framework issued by the Committee of Sponsoring

Organizations of the Treadway Commission

We also have audited in accordance with the standards of the Public Company Accounting Oversight Board United States the

consolidated balance sheets of CubeSmart L.P as of December 31 2011 and 2010 and the related consolidated statements of

operations capital and cash flows for each of the years in the three-year period ended December 31 2011 and our report dated

February 29 2012 expressed an unqualified opinion on those consolidated financial statements

Is KPMG LLP

Philadelphia Pennsylvania

February 29 2012

F-6

CUBESMART AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

in thousands except share data

December 31 December 312011 2010

ASSETS

Storage facilities 2107469 1743021Less Accumulated depreciation 318749 314530

Storage facilities net 1788720 1428491Cash and cash equivalents 9069 5891

Restricted cash 11291 10250

Loan procurement costs net of amortization 8073 15611

Investment in real estate ventures at equity 15181

Other assets net 43645 18576

Total assets 1875979 1478819

LIABILITIES AND EQUITY

Revolving credit facility 43000Unsecured term loan 400000 200000

Mortgage loans and notes payable 358441 372457

Accounts payable accrued expenses and other liabilities 51025 36172

Distributions payable 11401 7275Deferred revenue 9568 8873

Security deposits 490 489

Total liabilities 830925 668266

Noncontrolling interests in the Operating Partnership 49732 45145

Commitments and contingencies

Equity

7.75% Series Preferred shares $.0l par value 3220000 shares authorized

3100000 and shares issued and outstanding at December 31 2011 and

December 31 2010 respectively 31

Common shares $01 par value 200000000 shares authorized 122058919 and

98596796 shares issued and outstanding at December 31 2011 and December 31

2010 respectively 1221 986

Additional paid in capital 1309505 1026952Accumulated other comprehensive loss 12831 1121Accumulated deficit 342013 302601

Total CubeSmart shareholders equity 955913 724216

Noncontrolling interest in subsidiaries 39409 41192

Total equity 995322 765408

Total liabilities and equity 1875979 1478819

See accompanying notes to the consolidated financial statements

F-7

CUBESMART AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

in thousands except per share data

For the year ended December 31

2011 2010 2009

REVENUESRental income

Other property related income

Property management fee income

Total revenues

OPERATING EXPENSES

Property operating expenses

Depreciation and amortization

General and administrative

Total operating expenses

OPERATING INCOMEOTHER INCOME EXPENSE

Interest

Interest expense on loans

Loan procurement amortizationexpense

Loan procurement amortization expense early repayment of debt

Acquisition related costs

Equity in losses of real estate ventures

Other

Total other expense

LOSS FROM CONTINUING OPERATIONS

212106

21731

3768

237605

99160

68223

24693

192076

45529

33199

502881673823

28183

50581

5052

3596

3903

7499

2447

352810

398

1218

0.09

0.07

0.02

188922

17978

2829

209729

90261

61428

25406

177095

32634

377946463

759

386

44630

11996

4151

1826

5977

6019

0.06

0.08

188101

15460

56

203617

88395

66984

22569

177948

25669

45269

2339

648

46960

21291

6820

14139

20959

332

0.29

0.28

0.01

Weighted-average basic and diluted shares outstanding 102976

AMOUNTS ATTRIBUTABLE TO THE COMPANYSCOMMON SHAREHOLDERS

Loss from continuing operations

Total discontinued operations

Net loss

88157199

1616

13095

5702

7393

2080619869

937

See accompanying notes to the consolidated financial statements

F-8

DISCONTINUED OPERATIONSIncome from discontinued operations

Gain on disposition of discontinued operations

Total discontinued operations

NET INCOME LOSSNET LOSS INCOME ATTRIBUTABLE TO

NONCONTROLLING INTERESTS

Noncontrolling interests in the Operating Partnership

Noncontrolling interest in subsidiaries

NET LOSS ATTRIBUTABLE TO THE COMPANYDistribution to Preferred Shares

NET LOSS ATTRIBUTABLE TO THE COMPANYSCOMMON SHAREHOLDERS

Basic and diluted loss per share from continuing operations

attributable to common shareholders

Basic and diluted earnings per share from discontinued operations

attributable to common shareholders

Basic and diluted loss per share attributable to common shareholders

381

17557393

60

665937

1616 7393 937

0.14

93998 70988

CUBESMART AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF EQUITY

in thousands

Accumulated Noncontrolling

Additional Other Total Noncontrolling Interests in the

Common Shares Preferred Shares Paid in Comprehensive Accumulated Shareholders Interest in Total Operating

Number Amount Number Amount Capital Loss Deficit Equity Subsidiaries Equity Partnership

Balance at December 31 2008 57623 576 801029 7553 271124 522928 522928 46026

Contributions from noncontrolling

interests in subsidiaries 44739 44739 90Issuance of common shares net 34677 347 170501 170848 170848

Issuance of restricted shares 85

Conversion from units to shares 270

Amortization of restricted shares 1631 631 1631

Share compensation expense 1765 1765 1.765

Net income loss 937 937 665 272 60Other comprehensive income

Unrealized gain on interest

rate swap 6153 6153 6153

Unrealized gain on foreign

currencytranslation 526 526 526 27

Distributions __________________ ______________ __________________ ______________ ______________ ______________ 7609 7609 1383 8992 510

Balance at December 31 2009 92655 927 974926 874 279670 695309 44.021 739330 45394

Contributions from noncontrolhng

interests in subsidiaries IS IS

Issuance of common shares net 5610 56 47517 47573 47573

Issuance of restricted shares 203

Conversion from units to shares 73 674 675 675 675

Exercise of stock options 56 194 194 194

Amortization of restricted shares 1759 1759 1759

Share compensation expense 1882 1882 1882

Adjustment for noncontrollinginteresi in

operatingpartnership 1510 1510 1510 1510

Net loss income 7393 7393 1755 5638 381Othet comprehensive loss

Unrealized loss on foreign

currencytranslation 247 247 255 13

Distributions __________________ ______________ __________________ ______________ ______________ ______________14028 14028 4591 18619 690

Balance at December 31 2010 98597 986 1026952 1121 302601 724216 41192 765408 45145

Contributions from noncontrolling

interests in subsidiaries

Issuance of common shares net 23140 231 203788 204019 204019

Issuance of preferred shares net 3100 31 74817 74848 74848

Issuance of restricted shares 235

Conversion from units to shares 63 623 624 624 624Exercise of stock options 24 121 121 121

Amortization of restricted shares 1677 1677 1677

Sharecompensation expense 1527 1527 1527

Adjustment for noncontrolling

interest in operating partnership 7082 7082 7082 7082

Net loss income 398 398 2810 2412 35

Other comprehensive gain loss

Unrealized loss on interest

rate swap 11849 11849 11849 545Unrealized gain on foreign

currencytranslation 139 139 144

Preferred share distributions 1218 1218 1218Common share distributions

__________________ ______________ __________________ ______________ ______________ ______________30714 30714 4599 35313 1368

Balance at December 31 2011 122059 1221 3100 31 1309505 12831 342013 955913 39409 995322 49732

See accompanying notes to the consolidated financial statements

F-9

CUBESMART AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWSin thousands

For the Year Ended December 31

2011 2010 2009

Operating Activities

Net income loss 2447 6019 332Adjustments to reconcile net income loss to cash provided by operating activities

Depreciation and amortization 73702 70850 75908

Gain on disposition of discontinued operations 3903 1826 14139

Equity compensation expense 3204 3641 3396

Accretion of fair market value adjustment of debt 89 255 463Loan procurement amortization expense early repayment of debt 8167

Real estate venture loss 281Changes in other operating accounts

Other assets 23 427 388

Restricted cash 853 3889

Accounts payable and accrued expenses 2634 1437 1797Other liabilities L678 227 747

Net cash provided by operating activities 84327 71517 62214

Investing Activities

Acquisitions additions and improvements to storage facilities 471188 104441 17882Investment in real estate venture 15462Proceeds from sales of properties net 44460 37304 68257

Proceeds from notes receivable 20112

Proceeds from sales to noncontrolling interests 48641

Decrease increase in restricted cash 90 2242 164Net cash used in provided by investing activities 442100 44783 98852

Financing Activities

Proceeds from

Revolving credit facility 256700 95000 9500

Secured term loans 200000

Mortgage loans and notes payable 3537 116615

Unsecured term loans 400000

Principal payments on

Revolving credit facility 299700 52000 181500Unsecured term loans 200000 200000Secured term loans 57419Mortgage loans and notes payable 39321 196205 95211

Proceeds from issuance of common shares net 204019 47573 170852

Proceeds from issuance of preferred shares net 74848

Exercise of stock options 121 194

Contributions from noncontrolling interests in subsidiaries 15

Distributions paid to shareholders 27849 9407 6736Distributions paid to noncontrolling interests in Operating Partnership 1322 482 508Distributions paid to noncontrolling interest in subsidiaries 4599 4591 1383Loan procurement costs 5484 3708 16252

Net cash provided by used in financing activities 360951 123611 62042

Decrease increase in cash and cash equivalents 3178 96877 99024

Cash and cash equivalents at beginning of year 5891 102768 3744

Cash and cash equivalents at end of year 9069 5891 102768

Supplemental Cash Flow and Noncash Information

Cash paid for interest net of interest capitalized 33265 38346 43764

Supplemental disclosure of noncash activities

Acquisition related contingent consideration 1777

Notes receivable originated upon disposition of property 17600

Derivative valuation adjustment 12394 6153

Foreign currency translation adjustment 151 268 553

Mortgage loan assumption acquisition of storage facility 21827

See accompanying notes to the consolidated financial statements

F- 10

CUBESMART L.P AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

in thousands

December 31 December 31

2011 2010

ASSETS

Storage facilities 2107469 1743021Less Accumulated depreciation 318749 314530

Storage facilities net 1788720 1428491Cash and cash equivalents 9069 5891

Restricted cash 11291 10250

Loan procurement costs net of amortization 8073 15611

Investment in real estate ventures at equity 15181

Other assets net 43645 18576

Total assets 1875979 1478819

LIABILITIES AND CAPITAL

Revolving credit facility 43000Unsecured term loan 400000 200000

Mortgage loans and notes payable 358441 372457

Accounts payable accrued expenses and other liabilities 51025 36172Distributions payable 11401 7275

Defened revenue 9568 8873

Security deposits 490 489

Total liabilities 830925 668266

Limited Partnership interest of third parties 49732 45145

Commitments and contingencies

Capital

Operating Partner 968744 725337

Accumulated other comprehensive loss 12831 1121Total CubeSmart L.P capital 955913 724216

Noncontrolling interests in subsidiaries 39409 41192

Total capital 995322 765408

Total liabilities and capital 1875979 1478819

See accompanying notes to the consolidated financial statements

F-li

CUBESMART L.P AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

in thousands except per common unit data

For the year ended December 31

2011 2010 2009

REVENUESRental income

Other property related income

Property management fee income

Total revenues

OPERATING EXPENSES

Property operating expenses

Depreciation and amortization

General and administrative

Total operating expenses

OPERATING INCOMEOTHER INCOME EXPENSE

Interest

Interest expense on loans

Loan procurement amortization expense

Loan procurement amortization expense early

repayment of debt

Acquisition related costs

Equity in losses of real estate ventures

Other

Total other expense

212106

21731

3768

237605

99160

68223

24693

192076

45529

331995028

81673823

28183

50581

188922

17978

2829

209729

90261

61428

25406

177095

32634

377946463

759

386

44630

188101

15460

56

203617

88395

66984

22569

177948

25669

45269

2339

648

46960

LOSS FROM CONTINUING OPERATIONS

DISCONTINUED OPERATIONS

Income from discontinued operations

Gain on disposition of discontinued operations

Total discontinued operations

NET INCOME LOSSNET INCOME ATTRIBUTABLE TO

NONCONTROLLING INTERESTS

Noncontrolling interest in subsidiaries

NET LOSS ATTRIBUTABLE TO CUBESMART L.P

Limited Partnership interest of third parties

NET LOSS ATTRIBUTABLE TO OPERATING PARTNERDistribution to Preferred Units

NET LOSS ATTRIBUTABLE TO COMMON UNITHOLDERS

Basic and diluted loss per unit from continuing operations

attributable to common unitholders

Basic and diluted earnings per unit from discontinued operations

attributable to common unitholders

Basic and diluted loss per unit attributable to common unitholders

Weighted-average basic and diluted units outstanding

AMOUNTS ATTRIBUTABLE TO COMMON UNITHOLDERSLoss from continuing operations

Total discontinued operations

Net loss

88157199

1616

13095

5702

7393

2080619869

937

See accompanying notes to the consolidated financial statements

F- 12

5052 11996 21291

3596 4151 6820

3903 1826 14139

7499 5977 20959

2447 6019 332

2810 1755 665363 7774 99735 381 60

398 7393 937

12181616 7393 937

0.09 0.14 0.29

0.07 0.06 0.28

0.02 0.08 0.01

102976 93998 70988

CUBESMART L.P AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CAPITAL

in thousands

Balance at December 31 2008

Contributions from noncontrolting

interests in subsidiaries

Issuance of common OP units net

Issuance of restricted OP units

Exercise of OP unit options

Convertion from units to shares

Amortization of restricted OP units

OP unit compensation expense

Net loss income

Other comprehensive loss

Unrealized gain an interest rate swap..

Unrealized loss on foreign currency

translation

Distributions

Balance at December 31 2009

Contribations from noncontrolling

interests in subsidiaries

Issuance of common OP units net

Issaance of restricted OP units

Excrcise of OP unit options

Conversion from units to shares

Amortization of restricted OP units

OP unit compensation expense

Adjustment for Limited Partnership

interest of third parties

Net loss income

Other comprehensiveloss

Unrealized loss ott foreign currency

translation

Distributions

Balance at December 31 2010

Contributions from noncuntrolling interests in

subsidiaries

Issuance of common OP units net

Issuance of preferredOP units net

Issuance of restricted OP units

Exercise of OP unit options

Conversion from units to shares

Amortization of restricted OP units

OP unit compensation expense

Net lass income

Adjustment for Limited Partnership

interest of third parties

Other comprehensive income loss

Unrealized loss on interest rateswap..

Unrealized gain on foreign

currency translation

Preferred unit distributions

Common unit distributions

Balance at December 31 2011

11949

139

1218

___________ ___________ 30714 ________________

122059 3100 968744 12831

44739 44739

170848 170848

See accompanying notes to the consolidated financial statements

530481

Noncontrolling Operating

Interest In Total Partnership interest

Subsidiaries Capital of third parties

Number of Number of

Common of Preferred OP Accumulated Other Total

OP Units Units Operating Comprehensive Cubesmart L.P

Outstanding Outstanding Partner Loss Income Capital

57623

34677 170848

85

270

1631

1765

937

6153

526 526

____________ ____________ 7609 _________________ 7609

92655 696183 074 695309

7553 522928 522928 46026

1631

1765

937

1631

1765

665 272

6153 6153

90

60

526 27

1383 8992 51044021 739330 45394

15 15

47573 47573 47573

194 194 194

675 675 675 6751759 1759 1759

1882 1882 1882

1510 1510 1510 1510

7393 7393 1755 5638 381

247 247 255 1314028 14028 4591 18619 690

725337 1121 724216 41192 765408 45145

5610

203

56

73

98597

23140

235

24

63

204.019

3100 74848

121

624

1677

1527

398

7082

204019

74848

121

624

1677

1527

398

204019

74848

121

624

1677

1527

2810 2412

7082 7082

11.849 11849

139 144

1218 121830714 4599 35313

955913 39409 995322

624

35

7082

545

136849732

F- 13

CUBESMART L.P AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWSin thousands

For the Year Ended December 31

73702

39033204

89

8167

281

23853

2634

67884327

471188

1546244460

90

442100

256700

3537

400000

299700

200000

39321204019

74848

121

27849132245995484

360951

3178

5891

9069

33265

70850

18263641

255

4273889

1437

227

71517

104441

37304

20112

2242

44783

95000

52000

196205

47573

194

15

9407482

45913708

123611

96877102768

5891

38346

1777

268

332

75908

141393396

463

388

1797747

62214

17882

68257

48641

16498852

9500

200000

116615

181500

2000005741995211

170852

6736508

138316252

6204299024

3744

102768

43764

17600

6153

553

2011 2010 2009

2447 6019Operating Activities

Net income loss

Adjustments to reconcile net income loss to cash provided by

operating activities

Depreciation and amortization

Gain on disposition of discontinued operations

Equity compensation expense

Accretion of fair market value adjustment of debt

Loan procurement amortization expense early

repayment of debt

Real estate venture loss

Changes in other operating accounts

Other assets

Restricted cash

Accounts payable and accrued expenses

Other liabilities

Net cash provided by operating activities

Investing Activities

Acquisitions additions and improvements to storage facilities

Investment in real estate venture

Proceeds from sales of properties net

Proceeds from notes receivable

Proceeds from sales to noncontrolling interests

Decrease increase in restricted cash

Net cash used in provided by investing activities

Financing Activities

Proceeds from

Revolving credit facility

Secured term loans

Mortgage loans and notes payable

Unsecured term loans

Principal payments on

Revolving credit facility

Unsecured term loans

Secured term loans

Mortgage loans and notes payable

Proceeds from issuance of common units net

Proceeds from issuance of preferred units net

Exercise of unit options

Contributions from noncontrolling interests in subsidiaries

Distributions paid to unitholders

Distributions paid to Limited Partnership interest of third parties

Distributions paid to noncontrolling interest in subsidiaries

Loan procurement costs

Net cash provided by used in financing activities

Decrease increase in cash and cash equivalents

Cash and cash equivalents at beginning of year

Cash and cash equivalents at end of year

Supplemental Cash Flow and Noncash Information

Cash paid for interest net of interest capitalized

Supplemental disclosure of noncash activities

Acquisition related contingent consideration

Notes receivable originated upon disposition of property

Derivative valuation adjustment

Foreign currency translation adjustment

Mortgage loan assumption acquisition of storage facility

12394151

21827

See accompanying notes to the consolidated financial statements

F- 14

CUBESMART AND CUBESMART L.P

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

ORGANIZATION AND NATURE OF OPERATIONS

CubeSmart the Parent Company operates as self-managed and self-administered real estate investment trust REIT with its

operations conducted solely through CubeSmart L.P and its subsidiaries CubeSmart L.P Delaware limited partnership the

Operating Partnership operates through an umbrella partnership structure with the Parent Company Maryland REIT as its sole

general partner Effective September 14 2011 the Parent Company changed its name from U-Store-It Trust to CubeSmart and

the Operating Partnership changed its name from U-Store-It L.P to CubeSmart L.P In the notes to the consolidated financial

statements we use the terms the Company we or our to refer to the Parent Company and the Operating Partnership together

unless the context indicates otherwise The Companys self-storage facilities collectively the Properties are located in 26 states

throughout the United States and the District of Columbia and are presented under one reportable segment we own operate develop

manage and acquire self-storage facilities As more fully described in Note on November 2011 the Company acquired 16

properties from Storage Deluxe with purchase price of approximately $357.3 million

As of December 31 2011 the Parent Company owned approximately 96.3% of the partnership interests OP Units of the

Operating Partnership The remaining OP Units consisting exclusively of limited partner interests are held by persons who

contributed their interests in properties to us in exchange for OP Units Under the partnership agreement these persons have the right

to tender their OP Units for redemption to the Operating Partnership at any time for cash equal to the fair value of an equivalent

number of common shares of the Parent Company In lieu of delivering cash however the Parent Company as the Operating

Partnerships general partner may at its option choose to acquire any OP Units so tendered by issuing common shares in exchange

for the tendered OP Units If the Parent Company so chooses its conmion shares will be exchanged for OP Units on one-for-one

basis This one-for-one exchange ratio is subject to adjustment to prevent dilution With each such exchange or redemption the

Parent Companys percentage ownership in the Operating Partnership will increase In addition whenever the Parent Company issues

common or other classes of its shares it contributes the net proceeds it receives from the issuance to the Operating Partnership and the

Operating Partnership issues to the Parent Company an equal number of OP Units or other partnership interests having preferences

and rights that mirror the preferences and rights of the shares issued This structure is commonly referred to as an umbrella

partnership REIT or UPREIT

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation

The accompanying consolidated financial statements include all of the accounts of the Company and its majority-owned and/or

controlled subsidiaries The portion of these entities not owned by the Company is presented as noncontrolling interests as of and

during the periods consolidated All significant intercompany accounts and transactions have been eliminated in consolidation

When the Company obtains an economic interest in an entity the Company evaluates the entity to determine if the entity is deemed

variable interest entity VIE and if the Company is deemed to be the primary beneficiary in accordance with authoritative

guidance issued on the consolidation of VIEs When an entity is not deemed to be VIE the Company considers the provisions of

additional guidance to determine whether general partner or the general partners as group controls limited partnership or similar

entity when the limited partners have certain rights The Company consolidates entities that are VIEs and of which the Company is

deemed to be the primary beneficiary and ii entities that are non-VIEs which the Company controls and which the limited partners

do not have the ability to dissolve or remove the Company without cause nor substantive participating rights

Noncontrolling Interests

The FASB issued authoritative guidance regarding noncontrolling interests in consolidated financial statements which was effective

on January 2009 The guidance states that noncontrolling interests are the portion of equity net assets in subsidiary not

attributable directly or indirectly to parent The ownership interests in the subsidiary that are held by owners other than the parent

are noncontrolling interests Under the guidance such noncontrolling interests are reported on the consolidated balance sheets within

equity separately from the Companys equity On the consolidated statements of operations revenues expenses and net income or

loss from less-than-wholly-owned subsidiaries are reported at the consolidated amounts including both the amounts attributable to the

Company and noncontrolling interests Presentation of consolidated equity activity is included for both quarterly and annual financial

statements including beginning balances activity for the period and ending balances for shareholders equity noncontrolling interests

and total equity

F- 15

However per the FASB issued authoritative guidance on the classification and measurement of redeemable securities securities

that are redeemable for cash or other assets at the option of the holder not solely within the control of the issuer must be classified

outside of permanent equity This would result in certain outside ownership interests being included as redeemable noncontrolling

interests outside of permanent equity in the consolidated balance sheets The Company makes this determination based on terms in

applicable agreements specifically in relation to redemption provisions Additionally with respect to noncontrolling interests for

which the Company has choice to settle the contract by delivery of its own shares the Company considered the FASB issued

guidance on accounting for derivative financial instruments indexed to and potentially settled in Companys own stock to evaluate

whether the Company controls the actions or events necessary to issue the maximum number of shares that could be required to be

delivered under share settlement of the contract The guidance also requires that noncontrolling interests are adjusted each period so

that the carrying value equals the greater of its carrying value based on the accumulation of historical cost or its redemption fair value

The consolidated results of the Company include results attributable to units of the Operating Partnership that are not owned by the

Company These interests were issued in the form of Operating Partnership units and were component of the consideration the

Company paid to acquire certain self-storage facilities Limited partners who acquired Operating Partnership units have the right to

require the Operating Partnership to redeem part or all of their Operating Partnership units for at the Companys option an equivalent

number of common shares of the Company or cash based upon the fair value of an equivalent number of common shares of the

Company However the operating agreement contains certain circumstances that could result in net cash settlement outside the

control of the Company as the Company does not have the ability to settle in unregistered shares Accordingly consistent with the

guidance discussed above the Company will continue to record these noncontrolling interests outside of permanent equity in the

consolidated balance sheets Net income or loss related to these noncontrolling interests is excluded from net income or loss in the

consolidated statements of operations The Company has adjusted the carrying value of its noncontrolling interests subject to

redemption value to the extent applicable Based on the Companys evaluation of the redemption value of the redeemable

noncontrolling interest the Operating Partnership reflected these interests at their redemption value at December 31 2011 as the

estimated redemption value exceeded their carrying value The Operating Partnership recorded an increase to OP Units owned by third

parties and corresponding decrease to capital of $7.1 million at December 31 2011 Disclosure of such redemption provisions is

provided in Note

Noncontrolling interests are the portion of equity net assets in subsidiary not attributable directly or indirectly to parent The

ownership interests in the subsidiary that are held by owners other than the parent are noncontrolling interests Noncontrolling

interests are reported on the consolidated balance sheets within equity separately from the Companys equity On the consolidated

statements of operations revenues expensesand net income or loss from less-than-wholly-owned subsidiaries are reported at the

consolidated amounts including both the amounts attributable to the Company and noncontrolling interests Presentation of

consolidated equity activity is included for both quarterly and annual financial statements including beginning balances activity for

the period and ending balances for shareholders equity noncontrolling interests and total equity

Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America

requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of

contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the

reporting period Actual results could differ from those estimates Although we believe the assumptions and estimates we made are

reasonable and appropriate as discussed in the applicable sections throughout these consolidated financial statements different

assumptions and estimates could materially impact our reported results The current economic environment has increased the degree

of uncertainty inherent in these estimates and assumptions and changes in market conditions could impact our future operating results

Storage Facilities

Storage facilities are carried at historical cost less accumulated depreciation and impairment losses The cost of storage facilities

reflects their purchase price or development cost Costs incurred for the renovation of storage facility are capitalized to the

Companys investment in that property Acquisition costs ordinary repairs and maintenance are expensed as incurred major

replacements and betterments which improve or extend the life of the asset are capitalized and depreciated over their estimated useful

lives In connection with the Companys name change on September 14 2011 from U-Store-It Trust to CubeSmart the Companyhas and will continue to incur additional costs related to its rebranding initiative The Company expects to complete the rebranding

for all owned locations by the end of 2012 The primary cost of the rebranding relates to the new signage at each of the Companysfacilities Also during 2011 the Company introduced its store upgrade program SuperStore which added more personalized

services and technology to several of its stores including storage customization logistics services comprehensive moving services

organizational services and office amenities

F- 16

Purchase Price Allocation

When facilities are acquired the purchase price is allocated to the tangible and intangible assets acquired and liabilities assumed

based on estimated fair values When portfolio of facilities is acquired the purchase price is allocated to the individual facilities

based upon the fair value determined using an income approach or cash flow analysis using appropriate risk adjusted capitalization

rates which take into account the relative size age and location of the individual facility along with current and projected occupancyand rental rate levels or appraised values if available Allocations to the individual assets and liabilities are based upon comparablemarket sales information for land buildings and improvements and estimates of depreciated replacement cost of equipment

In allocating the purchase price for an acquisition the Company determines whether the acquisition includes intangible assets or

liabilities The Company allocated portion of the purchase price to an intangible asset attributed to the value of in-place leases This

intangible is generally amortized to expense over the expected remaining term of the respective leases Substantially all of the leases

in place at acquired facilities are at market rates as the majority of the leases are month-to-month contracts Accordingly to date no

portion of the purchase price has been allocated to above- or below-market lease intangibles To date no intangible asset has been

recorded for the value of tenant relationships because the Company does not have any concentrations of significant tenants and the

average tenant turnover is fairly frequent

Depreciation and Amortization

The costs of self-storage facilities and improvements are depreciated using the straight-line method based on useful lives ranging

from five to 40 years

Impairment of Long-Lived Assets

We evaluate long-lived assets for impairment when events and circumstances such as declines in occupancy and operating results

indicate that there may be impairment The carrying value of these long-lived assets is compared to the undiscounted future net

operating cash flows plus terminal value attributable to the assets to determine if the propertys basis is recoverable If propertys

basis is not considered recoverable an impairment loss is recorded to the extent the net carrying value of the asset exceeds the fair

value The impairment loss recognized equals the excess of net carrying value over the related fair value of the asset There were no

impairment losses recognized in accordance with these procedures during 2011 2010 and 2009

Long-Lived Assets Held for Sale

We consider long-lived assets to be held for sale upon satisfaction of the following criteria management commits to plan to

sell facility or groupof facilities the facility is available for immediate sale in its present condition subject only to terms that

are usual and customary for sales of such facilities an active program to locate buyer and other actions required to complete the

plan to sell the facility have been initiated the sale of the facility is probable and transfer of the asset is expected to be completed

within one year the facility is being actively marketed for sale at price that is reasonable in relation to its current fair value and

actions required to complete the plan indicate that it is unlikely that significant changes to the plan will be made or that the plan

will be withdrawn

Typically these criteria are all met when the relevant asset is under contract significant non-refundable deposits have been made by

the potential buyer the assets are immediately available for transfer and there are no contingencies related to the sale that may prevent

the transaction from closing In most transactions these conditions or criteria are not satisfied until the actual closing of the

transaction accordingly the facility is not identified as held for sale until the closing actually occurs However each potential

transaction is evaluated based on its separate facts and circumstances Properties classified as held for sale are reported at the lesser of

carrying value or fair value less estimated costs to sell

Cash and Cash Equivalents

Cash and cash equivalents are highly-liquid investments with original maturities of three months or less The Company maymaintain cash equivalents in financial institutions in excess of insured limits but believes this risk is mitigated by only investing in or

through major financial institutions

Restricted Cash

Restricted cash consists of purchase deposits and cash deposits required for debt service requirements capital replacement and

expense reserves in connection with the requirements of our loan agreements

F- 17

Loan Procurement Costs

Loan procurement costs related to borrowings were $13.0 million and $24.5 million at December 31 2011 and 2010 respectively

and are reported net of accumulated amortization of $4.9 million and $8.8 million as of December 31 2011 and 2010 respectively

The costs are amortized over the estimated life of the related debt using the effective interest method and reported as loan procurement

amortization expense

Other Assets

Other assets is comprised of the following as of December 31 2011 and 2010 in thousands

December 31

2011 2010

Intangible assets net of accumulated

amortization 23185 8201

Deposits on future settlements 9318 149

Accounts receivable 3676 2970

Prepaid insurance 1397 1409

Prepaid real estate taxes 1114 1557

Others 4955 4290

Total 43645 18576

Environmental Costs

Our practice is to conduct or obtain environmental assessments in connection with the acquisition or development of additional

facilities Whenever the environmental assessment for one of our facilities indicates that facility is impacted by soil or groundwater

contamination from prior owners/operators or other sources we will work with our environmental consultants and where appropriate

state governmental agencies to ensure that the facility is either cleaned up that no cleanup is necessary because the low level of

contaminationposes no significant risk to public health or the environment or that the responsibility for cleanup rests with third

party

Revenue Recognition

Management has determined that all of our leases are operating leases Rental income is recognized in accordance with the terms of

the leases which generally are month-to-month

The Company recognizes gains on disposition of properties only upon closing in accordance with the guidance on sales of real

estate Payments received from purchasers prior to closing are recorded as deposits Profit on real estate sold is recognized using the

full accrual method upon closing when the collectability of the sales price is reasonably assured and the Company is not obligated to

perform significant activities after the sale Profit may be deferred in whole or part until the sale meets the requirements of profit

recognition on sales under this guidance

Advertising and Marketing Costs

The Company incurs advertising and marketing costs primarily attributable to internet marketing campaigns and other media

advertisements The Company incurred $6.9 million $6.6 million and $6.5 million in advertising and marketing expensesfor the

years ended 2011 2010 and 2009 respectively

Equity Offering Costs

Underwriting discounts and commissions financial advisory fees and offering costs are reflected as reduction to additional paid-ia

capital For the year ended December 31 2011 the Company recognized $0.8 million of equity offering costs related to the issuance

of common and preferred shares during the year

F-i

Other Property Related Income

Other property related income consists of late fees administrative charges tenant insurance commissions sales of storage supplies

and other ancillary revenues derived by SuperStore services and is recognized in the period that it is earned

Capitalized Interest

The Company capitalizes interest incurred that is directly associated with construction activities until the asset is placed into service

Interest is capitalized to the related assets using weighted-average rate of the Companys outstanding debt The Company capitalized

$0.1 million during each of the years ended 2011 2010 and 2009

Derivative Financial Instruments

The Company carries all derivatives on the balance sheet at fair value The Company determines the fair value of derivatives by

observable prices that are based on inputs not quoted on active markets but corroborated by market data The accounting for changes

in the fair value of derivative instrument depends on whether the derivative has been designated and qualifies as part of hedging

relationship and if so the reason for holding it The Companys use of derivative instruments has been limited to cash flow hedges of

certain interest rate risks The Company had an interest rate cap agreement as of December 31 2011 that effectively limited the

LIBOR component of the interest rate on $100 million of 201 Credit Facility borrowings to 2.00% per annum through January 2012

Additionally the Company had interest rate swap agreements for notional principal amounts aggregating $400 million at

December 31 2011

Income Taxes

The Company elected to be taxed as real estate investment trust under Sections 856-860 of the Internal Revenue Code beginning

with the period from October 21 2004 commencement of operations through December 31 2004 In managements opinion the

requirements to maintain these elections are being met Accordingly no provision for federal income taxes has been reflected in the

consolidated financial statements other than for operations conducted through our taxable REIT subsidiaries

Earnings and profits which determine the taxability of distributions to shareholders differ from net income reported for financial

reporting purposes due to differences in cost basis the estimated useful lives used to compute depreciation and the allocation of net

income and loss for financial versus tax reporting purposes The tax basis in the Companys assets was $2.0 billion as of

December 31 2011 and $1.5 billion as ofDecember 31 2010

Distributions to shareholders are usually taxable as ordinary income although portion of the distribution may be designated as

capital gain or may constitute non-dividend distribution Annually the Company provides each of its shareholders statement

detailing the tax characterization of dividends paid during the preceding year as ordinary income capital gain or return of capital The

characterization of the Companys dividends for 2011 consisted of 78.0704% ordinary income distribution an 11.9314% capital

gain distribution and 9.9982% non-dividend distribution

The Company is subject to 4% federal excise tax if sufficient taxable income is not distributed within prescribed time limits The

excise tax equals 4% of the annual amount if any by which the sum ofa 85% of the Companys ordinary income and 95% of the

Companys net capital gain exceeds cash distributions and certain taxes paid by the Company No excise tax was incurred in 2011

2010 or 2009

Taxable REIT subsidiaries such as the TRS are subject to federal and state income taxes Our taxable REIT cubsidiaries have net

deferred tax asset related to expenses which are deductible for tax purposes in future periods of $0.4 million and $0.3 million

respectively as of December 31 2011 and 2010

Earnings per Share and Unit

Basic earnings per share and unit is calculated based on the weighted average number of common shares and restricted shares

outstanding during the period Diluted earnings per share and unit is calculated by further adjusting for the dilutive impact of share

options unvested restricted shares and contingently issuable shares outstanding during the period using the treasury stock method

Potentially dilutive securities calculated under the treasury stock method of 1378000 1177000 and 547000 in 2011 2010 and

2009 respectively were not included in the calculation of diluted earnings pershare and unit as they were identified as anti-dilutive

F- 19

Share Based Payments

We apply the fair value method of accounting for contingently issued shares and share options issued under our incentive award

plan Accordingly share compensation expense is recorded ratably over the vesting period relating to such contingently issued shares

and options The Company has recognized compensation expense on straight-line method over the requisite service period

Foreign Currency

The financial statements of foreign subsidiaries are translated to U.S Dollars using the period-end exchange rate for assets and

liabilities and an average exchange rate for each period for revenues expenses and capital expenditures The local currency is the

functionalcurrency

for the Companys foreign subsidiaries Translation adjustments for foreign subsidiaries are recorded as

component of accumulated other comprehensive loss in shareholders equity The Company recognizes transaction gains and losses

arising from fluctuations incurrency exchange rates on transactions denominated in currencies other than the functional currency in

earnings as incurred The Pound which represents the functional currency used by USIFB LLP our joint venture in England was

translated at an end-of-period exchange rate of approximately 1.54902 and 1.55237 U.S Dollarsper

Pound at December 31 2011 and

December 31 2010 respectively and an average exchange rate of 1.60377 and 1.54576 U.S Dollars per Pound for the years ended

December 31 2011 and December 31 2010 respectively Accordingly the Company recorded an unrealized gain of $0.2 million and

an unrealized loss of $0.3 million on foreign currency translation for the years ended December 31 2011 and 2010 respectively

Investments in Unconsolidated Real Estate Ventures

The Company accounts for its investments in unconsolidated Real Estate Ventures under the equity method of accounting Under

the equity method investments in unconsolidated joint ventures are recorded initially at cost as Investments in Real Estate Ventures

and subsequently adjusted for equity in earnings losses cash contributions less distributions On periodic basis management also

assesses whether there are any indicators that the value of the Companys investments in unconsolidated Real Estate Ventures may be

other than temporarily impaired An investment is impaired only if the fair value of the investment as estimated by management is

less than the carrying value of the investment and the decline is other than temporary To the extent impairment has occurred the loss

shall be measured as the excess of the carrying amount of the investment over the fair value of the investment as estimated by

management The determination as to whether an impairment exists requires significant management judgment about the fair value of

its ownership interest Fair value is determined through various valuation techniques including but not limited to discounted cash

flow models quoted market values and third party appraisals

Recent Accounting Pronouncements

In June 2011 the Financial Accounting Standards Board FASB issued an amendment to the accounting standard for the

presentation of comprehensive income The amendment requires entities to present the total of comprehensive income the

components of net income and the components of other comprehensive income either in single continuous statement of

comprehensive income or in two separate but consecutive statements In addition the amendment requires entities to present on the

face of the financial statements reclassification adjustments for items that are reclassified from other comprehensive income to net

income in the statements where the components of net income and the components of other comprehensive income are presented

This amendment is effective for fiscal years and interim periods beginning after December 15 2011 The Companys adoption of the

new standard will not have material impact on its consolidated financial position or results of operations as the amendment relates

only to changes in financial statement presentation

Concentration of Credit Risk

The storage facilities are located in major metropolitan and rural areas and have numerous tenants per facility No single tenant

represents significant concentration of our revenues The facilities in Florida California Texas and Illinois provided approximately

17% 12% 10% and 7% respectively for the yearended December 31 2011 The facilities in Florida California Texas and Illinois

provided total revenues of approximately 18% 15% 10% and 7% respectively for the year ended December 31 2010

F-20

STORAGE FACILITIES

The following summarizes the real estate assets of the Company as of December 31 2011 and December 31 2010

December 31 December 312011 2010

in thousands

Land 417067 374569

Buildings and improvements 1574769 1273938

Equipment 110371 93571

Construction in progress 5262 943

Total 2107469 1743021

Less accumulated depreciation 318749 314530

Storage facilities net 1788720 1428491

The 2011 construction in progress balance includes project costs of $1.6 million related to the rebranding initiative and $0.7

million related to the SuperStore initiative

F-2

The Company completed the following acquisitions dispositions and consolidations for the years ended December 31 2011 2010

and 2009

Facility/Portfolio Location Transaction Date Number of Facilities

Purchase Sales

Price in thousands

2011 Acquisitions

Burke Lake Asset

West Dixie Asset

White Plains Asset

Phoenix Asset

Houston Asset

Duluth Asset

Atlanta Assets

District Heights Asset

Storage Deluxe Assets

Leesburg Asset

Washington DC Asset

2011 Dispositions

Flagship Assets

Portage Asset

2010 Acquisitions

Frisco Asset

New York City Assets

Northeast Assets

Manassas Asset

Apopka Asset

Wyckoff Asset

McLearen Asset

Fairfax Station VAMiami FL

White Plains NYPhoenix AZ

Houston TX

Duluth GAAtlanta GA

District Heights MDMultiple locations in NY

CT PA and VA

Leesburg VA

Washington DC

Multiple locations in IN and

OHPortage MI

Frisco TXNew York NY

Multiple locations in NJ NYand MA

Manassas VAOrlando FL

Queens NYMcLearen VA

January 2011

April 2011

May2011

May2011

June2011

July2011

July2011

August 2011

November 2011

November 2011

December 2011

August 2011

November 2011

July 2010

September 2010

November 2010

November 2010

November 2010

December 2010

December 2010

14000

13500

23000

612

7600

2500

6975

10400

357310

13000

18250

467147

43500

1700

45200

5800

26700

18560

6050

4235

13600

10200

85145

2010 Dispositions

Sun City Asset

Inland Empire/Fayetteville Assets

2009 Dispositions

68th Street Asset

Albuquerque NM Asset

Palmetto Asset

Hotel Circle Asset

Jersey City Asset

Dale Mabry Asset

Winner Assets

Baton Rouge Asset

Eminent Domain

North Street Asset

Eminent Domain

Boulder Assets

Winner Assets

Brecksville Asset

Sun City CAMultiple locations in CA amd

NC

3100

35000

38100

2973

2825

5925

3600

11625

2800

17300

1918

32000

6600

3300

90866

16

27

18

19

12

October2010

December 2010

January 2009

April 2009

June 2009

July 2009

August 2009

August 2009

September 2009

Miami FL

Albuquerque NMOntario CA

Albuquerque NMJersey City NJ

Tampa FL

Multiple locations in CO

Baton Rouge LA September 2009

15

16

20

San Bernardino CABoulder CO

Multiple locations in CO

Brecksville OH

September 2009

September 2009

October 2009

November 2009

F-22

The Company provided $17.6 million in seller financing to the buyer as part of the Boulder Assets disposition which was

subsequently repaid during 2010

Approximately one third of the Baton Rouge Asset was taken in conjunction with eminent domain proceedings The

Company continues to own and operate the remaining two thirds of the asset and include the asset in the Companys total

portfolio property count

The entirety of the North Street Asset was taken in conjunction with eminent domain proceedings and the Companyremoved this asset from its total portfolio asset count During 2011 the Company received compensation from the state of

California Accordingly the Company recognized $1.9 million of income during 2011

ACQUISITIONS

2011

On November 2011 the Company acquired 16 properties from Storage Deluxe with purchase price of approximately $357.3

million The 16 properties purchased are located in New York Connecticut and Pennsylvania In connection with this acquisition the

Company allocated portion of the purchase price to the intangible value of in-place leases which aggregated $18.1 million The

estimated life of these in-place leases is 12 months and the amortization expensethat was recognized during 2011 was approximately

$3.0 million

Additionally during 2011 the Company acquired 11 self-storage facilities located throughout the United States for an aggregate

purchase price of approximately $109.8 million En connection with these acquisitions the Company allocated portion of the

purchase price to the intangible value of in-place leases which aggregated $7.0 million The estimated life of these in-place leases is

12 months and the amortization expense that was recognized during 2011 was approximately $2.8 million In connection with three of

the acquisitions the Company assumed mortgage debt at fair value with an outstanding principal balance totaling $21.4 million and

recorded net premium of $0.4 million to reflect the fair values of the debt at the time of assumption

2010

On April 28 2010 the Company acquired 85 management contracts from United Stor-All Management LLC United Stor-All

The Company accounted for this acquisition as business combination The 85 management contracts relate to facilities located in 16

states and the District of Columbia The Company recorded the fair value of the assets acquired which includes the intangible value

related to the management contracts as other assets net on the Companys consolidated balance sheet The Companys estimate of the

fair value of the acquired assets and liabilities utilized Level inputs and considered the probability of the expected period the

contracts would remain in place including estimated renewal periods and the amount of the discounted estimated future contingent

payments to be made The Company paid $4.1 million in cash for the contracts and recognized $1.8 million in contingent

consideration paid quarterly through 2013 The Company records changes in the fair value of the contingent consideration liability in

earnings As of December 31 2011 and 2010 no adjustments to the fair value were deemed necessary The average estimated life of

the intangible value of the management contracts is 56 months from the April 2010 closing and the amortization expense that was

recognized during 2011 and 2010 was approximately $1.3 million and $0.9 million respectively

During 2010 the Company acquired 12 self-storage facilities for an aggregate purchase price of $85.1 million and allocated

approximately $3.7 million to the intangible value of the in-place leases The amortizationexpense that was recognized during 2011

and 2010 was approximately $3.0 million and $0.7 million respectively

INVESTMENT IN UNCONSOLIDATED REAL ESTATE VENTURES

On September 26 2011 the Company contributed $15.4 million for 50% interest in partnership which owns nine storage

facilities in Pennsylvania Virginia New York New Jersey and Florida collectively the HSRE Venture HSREV The other partner

holds the remaining 50% interest in the partnership

HSREV is not consolidated because the Company is not the primary beneficiary the limited partners have the ability to dissolve or

remove the Company without cause and the Company does not possess substantive participating rights The Company accounts for its

unconsolidated interests in its Real Estate Ventures using the equity method The Companys investment in HSREV is included in

Investment in real estate ventures at equity on the Companys consolidated balance sheet and earnings attributable to HSREV is

presented in Equity in losses of real estate ventures on the Companys consolidated statements of operations

F-23

The Companys investment in real estate entities at December 31 2011 was $15.2 million and the Companys equity in losses of

real estate entities for the yearended December 31 2011 was approximately $0.3 million

The amounts reflected in the following tables except for the Companys share of equity and income are based on the historical

financial information of the individual Real Estate Venture

The following is summary of the financial position of the Real Estate Venture as of December 31 2011 in thousands

December 31

2011

Assets

Net property 78677

Other assets 2242

Total Assets 80919

Liabilities and equity

Other liabilities 867

Debt 60083

Equity 19969

Total Liabilities and equity 80919

The following is summary of results of operations of the Real Estate Venture for the year ended December 31 2011 in

thousands

December 312011

Revenue 9354

Operating expenses 3879

Interest expense net 3969

Depreciation and amortization 4115

Net loss 2609

SECURED CREDIT FACILITY UNSECURED CREDIT FACILITY AND UNSECURED TERM LOANS

On December 2009 the Company entered into three-year $450 million senior secured credit facility the Prior Facility

consisting of $200 million secured term loan and $250 million secured revolving credit facility The Prior Facility was

collateralized by mortgages on borrowing base properties as defined in the Prior Facility agreement The Prior Facility replaced

the prior three-year $450 million unsecured credit facility the 2006 Credit Facility which was entered into in November 2006

and consisted of $200 million unsecured term loan and $250 million in unsecured revolving loans All borrowings under the 2006

Credit Facility were repaid in December 2009

On September 29 2010 the Company amended the Prior Facility The Prior Facility as amended consisted of $200 million

unsecured term loan and $250 million unsecured revolving credit facility and had an outstanding balance of $43 million as of

December 31 2010 As amended the Prior Facility had three-year term expiring on December 2013 was unsecured and

borrowings on the facility incurred interest on borrowing spread determined by our leverage levels plus LIBOR

On June 20 2011 the Company entered into an unsecured Term Loan Agreement the Term Loan Facility which consisted of

$100 million term loan with five-year maturity and $100 million term loan with seven-year maturity The Term Loan Facility

permits the Company to request additional advances of five-year or seven-year loans in minimum increments of $5 million provided

that the aggregate of such additional advances does not exceed $50 million We incurred costs of $2.1 million in connection with

executing the agreement and capitalized such costs as component of loan procurement costs net of amortization on the consolidated

balance sheet Pricing on the Term Loan Facility ranges depending on the Companys leverage levels from 1.90% to 2.75% over

LIBOR for the five-year loan and from 2.05% to 2.85% over LIBOR for theseven-year loan and each loan has no LIBOR floor As

of December 31 2011 the Company had received two investment grade ratings and therefore pricing on the Term Loan Facility

ranges from 1.45% to 2.10% over LIBOR for the five-year loan and from 1.60% to 2.25% over LIBOR for the seven-year loan

F-24

On December 2011 the Company entered into new credit facility comprised of $100 million unsecured term loan maturing in

December 2014 $200 million unsecured term loan maturing in March 2017 and $300 million unsecured revolving facility

maturing in December 2015 the 2011 Credit Facility The 2011 Credit Facility replaces in its entirety our Prior Facility In

connection with obtaining the 2011 Credit Facility the Company paid additional deferred financing costs of $3.4 million and wrote

off deferred financing fees related to the Prior Facility of $6.1 million

Pricing on the 2011 Credit Facility depends on the Companys unsecured debt credit rating At our current Baa3/BBB- level

amounts drawn under the revolving facility are priced at 1.80% over LIBOR with no LIBOR floor Amounts drawn under the term

loan portion of the 2011 Credit Facility are priced at 1.75% over LIBOR with no LIBOR floor

On December 31 2011 $200 million of unsecured term loan borrowings were outstanding under the Term Loan Facility $200

million of unsecured term loan borrowings were outstanding under the 2011 Credit Facility and $400 million was available for

borrowing under the 2011 Credit Facility The Company had interest rate swaps as of December 31 2011 that fix LIBOR on $200

million of borrowings under the 2011 Credit Facility maturing in March 2017 at 1.34% In addition at December 31 2011 the

Company had interest rate swaps that fix LIBOR on both the five and seven-year term loans under the Term Loan Facility through

their respective maturity dates The interest rate swap agreements fix thirty day LIBOR over the terms of the five and seven-year term

loans at 1.80% and 2.47% respectively The Company recognized loan procurement amortization expense early repayment of debt

of $8.2 million related to the write-off of unamortized loan procurement costs associated with the Prior Facility

As of December 31 2011 borrowings under the 2011 Credit Facility and Term Loan Facility had weighted average interest rate

of 3.57% and the effective interest rates on the five and seven-year term loans were 3.65% and 4.47% respectively after giving

consideration to the interest rate swaps described in Note 13

The Companys ability to borrow under the 2011 Credit Facility and Term Loan Facility is subject to ongoing compliance with

certain financial covenants which include

Maximum total indebtedness to total asset value of 60.0% at any time

Minimum fixed charge coverage ratio of 1.501.00 and

Minimum tangible net worth of $821211200 plus 75% of net proceeds from equity issuances after June 30 2010

Further under the 2011 Credit Facility and Term Loan Facility the Company is restricted from paying distributions on our

common shares that would exceed an amount equal to the greater ofi 95% of our funds from operations and ii such amount as

may be necessary to maintain the Companys REIT status

The Company is currently in compliance with all of its financial covenants and anticipate being in compliance with all of its

financial covenants through the terms of the 2011 Credit Facility and Term Loan Facility

F-25

MORTGAGE LOANS AND NOTES PAYABLE

The Companys mortgage loans and notes payable are summarized as follows

Carrying Value as of

December 31 December 31 Effective Maturity

Mortgage Loan 2011 2010 Interest Rate Date

in thousands

YSI 12 1477 5.97% Sep-11

YSI 13 1270 5.97% Sep-li

YSI 53 9100 5.93% Jul-12

YSI 74834 76137 5.13% Aug-12

YASKY 80000 80000 4.96% Sep-12

YSI 14 1703 1759 5.97% Jan-13

YSI7 3032 3100 6.50% Jun-13

YSI 1733 1771 6.50% Jun-13

YSI9 1906 1948 6.50% Jun-13

YSI 17 3987 4121 6.32% Jul-13

YSI 27 481 499 5.59% Nov-13

YSI 30 7049 7316 5.59% Nov-13

USIFB 7125 3726 4.80% Dec-13

YSI 11 2350 2420 5.87% Jan-14

YSI5 3100 3193 5.25% Jan-14

YSI 28 1509 1555 5.59% Mar-14

YSI 34 14823 8.00% Jun-14

YSI 37 2174 2210 7.25% Aug-14

YSI 40 2520 7.25% Aug-14

Y5144 1070 1095 7.00% Sep-14

YSI41 3775 3879 6.60% Sep-14

YSI 38 3973 6.35% Oct-14

YSI 45 5353 5443 6.75% Oct-14

YSI 46 3430 6.75% Oct-14

Y5143 2919 6.50% Nov-14

YSI 48 24870 25270 7.25% Nov-14

YSI 50 2260 2322 6.75% Dec-14

YSI 10 4011 4091 5.87% Jan-15

YSI 15 1832 1877 6.41% Jan-15

YSI 52 4884 5.44% Jan-15

YSI 20 60551 62459 5.97% Nov-15

YSI 51 7423 6.36% Oct-16

YSI31 13414 13660 6.75% Jun-19aYSI 35 4464 4499 6.90% Jul-19

YSI 32 5950 6058 6.75% Jul-19

YS133 11157 11370 6.42% Jul-19

YSI 42 3184 6.88% Sep-19

YSI 39 3867 3931 6.50% Sep-19

YSI 47 3091 3176 6.63% Jan-20

Unamortized fair value adjustment 386 24

Total mortgage loans and notes payable 358441 372457

These borrowings have fixed interest rate for the first five years of their term which then resets and remains constant over

the final five years of the loan term

As of December 31 2011 and 2010 the Companys mortgage loans payable were secured by certain of its self-storage facilities

with net book values of approximately $514 million and $540 million respectively The following table represents the future principal

payment requirements on the outstanding mortgage loans and notes payable at December 31 2011 in thousands

F-26

2012 168763

2013 308162014 64443

2015 64598

2016 7601

2017 and thereafter 21834

Total mortgage payments 358055

Plus Unamortized fair value adjustment 386

Total mortgage indebtedness 358441

The Company currently intends to fund its 2012 principal payment requirements from cash provided by operating activities newdebt originations and/or additional borrowings under our unsecured 2011 Credit Facility $400 million available as of December 31

2011

NONCONTROLLING INTERESTS

Variable Interests in Consolidated Real Estate Joint Ventures

On August 13 2009 the Company through wholly-owned affiliate formed joint venture HART with an affiliate of

Heitman LLC Heitman to own and operate 22 self-storage facilities which are located throughout the United States Upon

formation Heitman contributed approximately $51 million of cash to newly-formed limited partnership and the Companycontributed certain unencumbered wholly-owned properties with an agreed upon value of approximately $102 million to such limited

partnership In exchange for its contribution of those properties the Company received cash distribution from HART of

approximately $51 million and retained 50% interest in HART The Company is the managing partner of HART and the manager of

the properties owned by HART in exchange for market rate management fee

The Company determined that HART is variable interest entity and that the Company is the primary beneficiary Accordingly

the Company consolidates the assets liabilities and results of operations of HART The 50% interest that is owned by Heitman is

reflected as noncontrolling interest in subsidiaries within permanent equity separate from the Companys equity on the consolidated

balance sheets At December 31 2011 HART had total assets of $86.7 million including $84.4 million of storage facilities net and

total liabilities of $2.2 million

USIFB LLP the Venture was formed to own operate acquire and develop self-storage facilities in England The Company

owns 97% interest in the Venture through wholly-owned subsidiary and the Venture commenced operations at two facilities in

London England during 2008 The Company determined that the Venture is variable interest entity and that the Company is the

primary beneficiary Accordingly the Company consolidates the assets liabilities and results of operations of the Venture At

December 31 2011 the Venture had total assets of$ll.3 million and total liabilities of $7.6 million including two mortgage loans

totaling $7.1 million secured by storage facilities with net book value of$ll.0 million At December 31 2011 the Ventures

creditors had no recourse to the general credit of the Company

Operating Partnership Ownership

The Company follows guidance regarding the classification and measurement of redeemable securities Under this guidance

securities that are redeemable for cash or other assets at the option of the holder and not solely within the control of the issuer must

be classified outside of permanent equity/capital This classification results in certain outside ownership interests being included as

redeemable noncontrolling interests outside of permanent equity/capital in the consolidated balance sheets The Company makes this

determination based on terms in applicable agreements specifically in relation to redemption provisions

Additionally with respect to redeemable ownership interests in the Limited Partnership held by third parties for which CubeSmart

has choice to settle the redemption by delivery of its own shares the Operating Partnership considered the guidance regarding

accounting for derivative financial instruments indexed to and potentially settled in companys own shares to evaluate whether

CubeSmart controls the actions or events necessary to presume share settlement The guidance also requires that noncontrolling

interests classified outside of permanent capital be adjusted each period to the greater of the carrying value based on the accumulation

of historical cost or the redemption value

Approximately 3.7% of the outstanding OP Units as of December 31 2011 and December 31 2010 were not owned by the general

partner The interests in the Operating Partnership represented by these OP Units were component of the consideration that the

Operating Partnership paid to acquire certain self-storage facilities The holders of the OP Units are limited partners in the Operating

Partnership and have the right to require CubeSmart to redeem all or part of their OP Units for at the general partners option an

F-27

equivalent number of common shares of CubeSmart or cash based upon the fair value of an equivalent number of common shares of

CubeSmart However the partnership agreement contains certain provisions that could result in settlement outside the control of

CubeSmart and the Operating Partnership as CubeSmart does not have the ability to settle in unregistered shares Accordingly

consistent with the guidance the Operating Partnership will record the OP Units owned by third parties outside of permanent capital

in the consolidated balance sheets Net income or loss related to the OP Units owned by third parties is excluded from net income or

loss attributable to Operating Partner in the consolidated statements of operations

Theper Unit cash redemption amount would equal the average of the closing prices of the common shares of CubeSmart on the

New York Stock Exchange for the 10 trading days ending prior to CubeSmarts receipt of the redemption notice for the applicable

Unit At December 31 2011 and 20104674136 and 4737136 OP units respectively were outstanding respectively and the

calculated aggregate redemption value of outstanding OP units was based upon CubeSmartsaverage closing share prices Based on

the Companys evaluation of the redemption value of the redeemable noncontrOlling interest the Company has reflected these

interests at their redemption value at December 31 2011 and 2010 as the estimated redemption value exceeded their carrying value

The Operating Partnership recorded an increase to OP Units owned by third parties and corresponding decrease to capital of $7.1

million and $1.5 million at December 31 2011 and 2010 respectively

RELATED PARTY TRANSACTIONS

Corporate Office Leases

Subsequent to its entry into lease agreements with related parties for office space the Operating Partnership entered into sublease

agreements with various unrelated tenants for the related office space Each of these properties is part of Airport Executive Park 50-

acre office and flex development located in Cleveland Ohio which is owned by former executives Our independent Trustees

approved the terms of and entry into each of the office lease agreements by the Operating Partnership The table below shows the

office space subject to these lease agreements and certain key provisions including the term of each lease agreement the period for

which the Operating Partnership may extend the term of each lease agreement and the minimum and maximum rents payable per

month during the term

Fixed

Approximate Period of Fixed Minimum Maximum Rent

Office Space Square Footage Term Extension Option Rent Per Month Per Month

The Parkview Building 6745

Engle Road and 6751

Engle Road 21900 12/31/2014 Five-year 25673 31205

6745 Engle Road Suite 100 2212 12/31/2014 Five-year 3051 37096745 Engle RoadSuite 110 1731 12/31/2014 Five-year 2387 2901

6751 Engle Road Suites

andD 3000 12/31/2014 Five-year 3137 3771

Our Operating Partnership may extend the lease agreement beyond the termination date by the period set forth in this column

at prevailing market rates upon the same terms and conditions contained in each of the lease agreements

In addition to monthly rent the office lease agreements provide that our Operating Partnership reimburse for certain maintenance

and improvements to the leased office space The total amounts of lease payments incurred under the six office leases during the

years ended December 31 2011 and December 31 2010 were approximately $0.5 million and $0.5 million respectively

Total future minimum rental payments due in accordance with the related party lease agreements and total future cash receipts due

from our subtenants as of December 31 2011 are as follows

Due to Related Party Due from Subtenant

Amount Amount

in thousands

2012 475 314

2013 499 314

2014 499 315

1473 943

F-28

Other

During the third quarter of 2009 the Company entered into relocation transaction with member of management whereby the

Company purchased the former residence of the member of management for $985000 which was recorded as component of other

assets The Company sold the asset on September 10 2010

10 FAIR VALUE OF FINANCIAL INSTRUMENTS

The fair values of financial instruments including cash and cash equivalents accounts receivable and accounts payable

approximates their respective carrying values at December 31 2011 and 2010 The Company had fixed interest rate loans with

carrying value of $758.4 million and $372.5 million at December 31 2011 and 2010 respectively The estimated fair values of these

fixed rate loans were $736.3 million and $351.8 million at December 31 2011 and 2010 respectively The Company had variable

interest rate loans at Decetnber 31 2010 that had carrying value $243.0 million The estimated fair value of the variable interest rate

loans approximates the carrying value due to the floating rate nature and market spreads These estimates are based on discounted

cash flow analyses assuming market interest rates for comparable obligations at December 31 2011 and 2010

11 DISCONTINUED OPERATIONS

For the years ended December 31 2011 2010 and 2009 discontinued operations relates to 19 properties that the Company sold

during 2011 proceeds received in conjunction with eminent domain proceedings on our North Street asset during 2009 16

properties that the Company sold during 2010 and 20 properties that the Company sold during 2009 one of which was held-for-sale

at December 31 2008 see Note Each of the sales during 2011 2010 and 2009 resulted in the recognition of gain which in the

aggregate totaled $3.9 million $1.8 million and $14.1 million respectively

The following table summarizes the revenue and expense information for the period the Company owned the properties classified

as discontinued operations during the years ended December 31 2011 2010 and 2009 in thousands

For the year ended December 31

2011 2010 2009

REVENUESRental income 4101 12142 19985

Other property related income 2394 1253 1757

Total revenues 6495 13395 21742

OPERATING EXPENSES

Property operating expenses 2040 6016 8337

Depreciation and amortization 859 3228 6585

Total operating expenses 2899 9244 14922

OPERATING INCOME 3596 4151 6820

Income from discontinued operations 3596 4151 6820Gain on disposition of discontinued operations 3903 1826 14139

Income from discontinued operations 7499 5977 20959

12 COMMITMENTS AND CONTINGENCIES

The Company currently owns five self-storage facilities subject to ground leases and four other self-storage facilities having only

parcels of land that are subject to ground leases The Company recorded ground rent expense of approximately $0.3 million for the

year ended December 31 2011 and $0.2 million for each of the years ended December 31 2010 and 2009 respectively Total future

minimum rental payments under non-cancelable ground leases are as follows

Ground Lease

Amount

in thousands

2012 988

2013 988

2014 940

2015 860

2016 887

2017 and thereafler.. 38572

43235

F-29

The Company has been named as defendant in lawsuits in the ordinary course of business In most instances these claims are

covered by the Companys liability insurance coverage Management believes that the ultimate settlement of the suits will not have

material adverse effect on the Companys financial statements

13 RISK MANAGEMENT AND USE OF FINANCIAL INSTRUMENTS

The Companys use of derivative instruments is limited to the utilization of interest rate agreements or other instruments to manage

interest rate risk exposures and not for speculative purposes The principal objective of such arrangements is to minimize the risks

andlor costs associated with the Companys operating and financial structure as well as to hedge specific transactions The

counterparties to these arrangements are major financial institutions with which the Company and its subsidiaries may also have other

financial relationships The Company is potentially exposed to credit loss in the event of non-performance by these counterparties

However because of the high credit ratings of the counterparties the Company does not anticipate that any of the counterparties will

fail to meet these obligations as they come due The Company does not hedge credit or property value market risks

The Company has entered into interest rate swap agreements that qualify and are designated as cash flow hedges designed to reduce

the impact of interest rate changes on its variable rate debt Therefore the interest rate swaps are recorded in the consolidated balance

sheet at fair value and the related gains or losses are deferred in shareholders equity as Accumulated Other Comprehensive Loss

These deferred gains and losses are amortized into interest expense during the period or periods in which the related interest payments

affect earnings However to the extent that the interest rate swaps are not perfectly effective in offsetting the change in value of the

interest payments being hedged the ineffective portion of these contracts is recognized in earnings immediately Ineffectiveness was

immaterial for all periods presented

The Company formally assesses both at inception of hedge and on an on-going basis whether each derivative is highly-effective

in offsetting changes in cash flows of the hedged item If management determines that derivative is highly-effective as hedge then

the Company accounts for the derivative using hedge accounting pursuant to which gains or losses inherent in the derivative do not

impact the Companys results of operations If management determines that derivative is not highly-effective as hedge or if

derivative ceases to be highly-effective hedge the Company will discontinue hedge accounting prospectively and will reflect in its

statement of operations realized and unrealized gains and losses in respect of the derivative

The following table summarizes the terms and fair values of the Companys derivative financial instruments at December 31 2011

dollars in thousands

Fair Value

Hedge Notional December 31Product Hedge Type Amount Strike Effective Date Maturity 2011

Cap Cashflow 100000 2.0000% 2/1/2011 1/31/2012

Swap Cash flow 40000 1.8025% 6/20/2011 6/20/2016 1494Swap Cash flow 40000 1.8025% 6/20/2011 6/20/2016 1502Swap Cash flow 20000 1.8025% 6/20/2011 6/20/2016 727Swap Cash flow 75000 1.3360% 12/30/2011 3/31/2017 907Swap Cashflow 50000 1.3360% 12/30/2011 3/31/2017 484Swap Cashflow 50000 1.3360% 12/30/2011 3/31/2017 485Swap Cash flow 25000 1.3375% 12/30/2011 3/31/2017 319Swap Cash flow 40000 2.4590% 6/20/2011 6/20/2018 2553Swap Cash flow 40000 2.4725% 6/20/2011 6/20/2018 2628Swap Cash flow 20000 2.4750% 6/20/2011 6/20/2018 1295

12394

14 FAIR VALUE MEASUREMENTS

The Company applies the methods of fair value as described in authoritative guidance to value its financial assets and liabilities As

defined in the guidance fair value is based on the price that would be received from the sale of an asset or paid to transfer liability in

an orderly transaction between market participants at the measurement date In order to increase consistency and comparability in fair

value measurements the guidance establishes fair value hierarchy that prioritizes observable and unobservable inputs used to

measure fair value into three broad levels which are described below

Level Quoted prices unadjusted in active markets that are accessible at the measurement date for assets or liabilities The

fair value hierarchy gives the highest priority to Level inputs

Level Observable prices that are based on inputs not quoted on active markets but corroborated by market data

F-30

Level Unobservable inputs are used when little or no market data is available The fair value hierarchy gives the lowest

priority to Level inputs

In determining fair value the Company utilizes valuation techniques that maximize the use of observable inputs and minimize the

use of unobservable inputs to the extent possible as well as considering counterparty credit risk in its assessment of fair value

Financial assets and liabilities carried at fair value as of December 31 2011 are classified in the table below in one of the three

categories described above dollars in thousands

Level Level Level

Interest Rate Swap Derivative Liabilities 12394

Total liabilities at fair value 12394

There were no financial assets and liabilities carried at fair value as of December 31 2010

Financial assets and liabilities carried at fair value were classified as Level inputs For financial liabilities that utilize Level

inputs the Company utilizes both direct and indirect observable price quotes including LIBOR yield curves bank price quotes for

forward starting swaps NYMEX futures pricing and common stock price quotes Below is summary of valuation techniques for

Level financial liabilities

Interest rate swap derivative assets and liabilities valued using LIBOR yield curves at the reporting date Counterparties

to these contracts are most often highly rated financial institutions none of which experienced any significant downgrades in

2011 that would reduce the amount owed by the Company Although we have determined that the majority of the inputs

used to value our derivatives fall within Level of the fair value hierarchy the credit valuation adjustments associated with

our derivatives utilize Level inputs such as estimates of current credit spreads to evaluate the likelihood of default by us

and the counterparties However as of December 31 2011 we have assessed the significance of the effect of the credit

valuation adjustments on the overall valuation of our derivative positions and have determined that the credit valuation

adjustments are not significant to the overall valuation of our derivatives As result we have determined that our derivative

valuations in their entirety are classified in Level of the fair value hierarchy

15 SHARE-BASED COMPENSATION PLANS

On June 2010 the Companys shareholders approved an amendment and restatement of the Companys 2007 Equity Incentive

Plan share-based employee compensation plan originally approved by shareholders on May 2007 as amended and restated the

2007 Plan On October 19 2004 the Companys sole shareholder approved share-based employee compensation plan the 2004

Equity Incentive Plan the 2004 Plan and collectively with the 2007 Plan the Plans Thepurpose

of the Plans is to attract and

retain highly qualified executive officers Trustees and key employees and other persons and to motivate such officers Trustees key

employees and other persons to serve the Company and its affiliates to expend maximum effort to improve the business results and

earnings of the Company by providing to such persons an opportunity to acquire or increase direct proprietary interest in the

operations and future success of the Company To this end the Plans provide for the grant of share options share appreciation rights

restricted shares share units unrestricted shares dividend equivalent rights and cash awards Any of these awards may but need not

be made as performance incentives to reward attainment of annual or long-term performance goals Share options granted under the

Plans may be non-qualified share options or incentive share options

The Plans are administered by the Compensation Committee of the Companys Board of Trustees the Compensation

Committee which is appointed by the Board of Trustees The Compensation Committee interprets the Plans and subject to its right

to delegate authority to grant awards determines the terms and provisions of option grants and share awards

The 2007 Plan uses Fungible Units methodology for computing the maximum number of common shares available for issuance

under the 2007 Plan The Fungible Units methodology assigns weighted values to different types of awards under the 2007 Plan

without assigning specific numerical limits for different types of awards Upon shareholder approval of the amendment and

restatement of the 2007 plan in June 2010 Fungible Pool Limit was established consisting of 4728561 shares plus any commonshares restored to availability upon expiration or forfeiture of then-currently outstanding options or restricted share awards consisting

of 372135 shares

F-3

The 2007 Plan provides that any common shares made the subject of awards in the form of options or share appreciation rights shall

be counted against the Fungible Pool Limit as one unit Any common shares made the subject of awards under the 2007 Plan in

the form of restricted shares or share units each Full-Value Award shall be counted against the Fungible Pool Limit as 1.66 units

The Fungible Pool Limit and the computation of the number of common shares available for issuance are subject to adjustment upon

certain corporate transactions or events including share splits reverse share splits and recapitalizations The number of shares

counted against the Fungible Pool Limit includes the full number of shares subject to the award and is not reduced in the event shares

are withheld to fund withholding tax obligations or in the case of options and share appreciation rights where shares are applied to

pay the exercise price If an option or other award granted under the 2007 Plan expires is forfeited or otherwise terminates the

common shares subject to any portion of such option or other award that expires is forfeited or that otherwise terminates as the case

may be will again become available for the issuance under the 2007 Plan

In addition to the overall limit on the number of shares that may be subject to awards under the 2007 Plan the 2007 Plan limits the

number of shares that may be the subject of awards during the three-year period ending December 31 2012 Specifically the average

of the following three ratios each expressed as percentage shall not exceed the greater of two percent 2% or the mean of the

Companys GICS peer group for the three-year period beginning January 2010 and ending December 31 2012 The three ratios

would correspond to the three calendar years in the three-year period ending December 31 2012 and each ratio would be computed as

the number of shares subject to awards granted in the applicable year divided by ii the sum of the number of common shares and

units of the Companys operating partnership OP Units exchangeable into common shares outstanding at the end of such year

Solely for purposes of calculating the number of shares subject to awards under this limitation shares underlying Full-Value Awards

will be taken into account in the numerator of the foregoing ratios as 1.5 shares

Subject to adjustment upon certain corporate transactions or events participant may not receive awards with shares subject to

awards being counted depending on the type of award in the proportions ranging from 1.0 to 1.66 as described above in any one

calendar year covering more than 1000000 units

With respect to the 2004 Plan total of million common shares are reserved for issuance under the 2004 Plan The maximum

number of common shares underlying equity awards that may be granted to an individual participant under the 2004 Plan during any

calendar year is 400000 for options or share appreciation rights and 100000 for restricted shares or restricted share units The

maximum number of common shares that can be awarded under the Plan to any person other than pursuant to an option share

appreciation rights or time-vested restricted shares is 250000 percalendar

yearunder the 2004 Plan To the extent that options expire

unexercised or are terminated surrendered or canceled the options and share awards become available for future grants under the

2004 Plan unless the 2004 Plan has been terminated

Under the Plans the Compensation Committee determines the vesting schedule of each share award and option The exercise price

for options is equivalent to the fair value of the underlying common shares at the grant date The Compensation Committee also

determines the term of each option which shall not exceed 10 yearsfrom the grant date

Share Options

The fair values for options granted in 2011 2010 and 2009 were estimated at the time the options were granted using the Black

Scholes option-pricing model applying the following weighted average assumptions

Assumptions 2011 2010 2009

Risk-free interest rate 3.3% 3.7% 2.6%

Expected dividend yield 4.8% 5.4% 5.5%

Volatility 54.60% 57.60% 46.49%

Weighted average expected life of the options 9.9 years 9.9 years 9.8 years

Weighted average grant date fair value of options

granted per share 3.40 2.60 102

Expected volatility is based upon the level of volatility historically experienced

Expected life is based upon our expectations of stock option recipients expected exercise and termination patterns

The Black-Scholes option-pricing model was developed for use in estimating the fair value of traded options In addition option

pricing models require the input of highly subjective assumptions including the expected stock price volatility Volatility for the 2009

2010 and 2011 grants was based on the trading history of the Companys shares

F-32

1112011 2010 and 2009 the Company recognized compensation expense related to options issued to employees and executives of

approximately $1.5 million $1.9 million and $1.8 million respectively which was recorded in general and administrative expense

Approximately 347000 share options were issued during 2011 for which the fair value of the options at their respective grant dates

was approximately $0.9 million which vest over three and five years As of December 31 2011 the Company had approximately

$1.4 million of unrecognized option compensation cost related to all grants that will be recorded over the next five years

The table below summarizes the option activity under the Plan for the years ended December 31 2011 2010 and 2009

Weighted Average

Number of Shares Weighted Average Remaining

Under Option Exercise Price Contractual Term

Balance at December 31 2008 3311099 13.84 8.42

Options granted 1456881 3.75 9.09

Options canceled 221676 11.73

Options exercised

Balance at December 31 2009 4546304 10.71 7.95

Options granted 574556 7.32 9.06

Options canceled 50875 12.71

Options exercised 56225 3.46 8.11

Balance at December 31 2010 5013760 10.38 7.18

Options granted 346882 9.38 9.11

Options canceled 80924 940

Options exercised 24000 5.06 6.84

Balance at December 31 2011 5255718 10.35 6.33

Vested or expected to vest at December31 2011 5255718 10.35 6.33

Exercisable at December 31 2011 3920799 11.55 5.88

At Iecember 31 2011 the aggregate intrinsic value of options outstanding of options that vested or expected to vest and of options

that were exercisable was approximately $8.2 million The aggregate intrinsic value of options exercised was approximately $0.1

million for the year ended December 31 2011

Restricted Shares

The Company applies the fair value method of accounting for contingently issued shares As such each grant is recognized ratably

over the related vesting period Approximately 314000 restricted shares were issued during 2011 for which the fair value of the

restricted shares at their respective grant dates was approximately $2.6 million which vest over three and five years During 2010

approximately 307000 restricted shares were issued for which the fair value of the restricted shares at their respective grant dates was

approximately $2.8 million As of December 31 2011 the Company had approximately $2.4 million of remaining unrecognized

restricted share compensation costs that will be recognized over the next four years Restricted share awards are considered to be

performance awards and are valued using the stock price on the grant date

In 2011 2010 and 2009 the Company recognized compensation expense related to restricted shares issued to employees and

Trustees of approximately $2.2 million $1.8 million and $1.6 million respectively these amounts were recorded in general and

administrative expense The following table presents non-vested restricted share activity during 2011

Number of Non-

Vested Restricted

Shares

Non-Vested at January 2011 671822

Granted 314138

Vested 285404Forfeited 141123

Non-Vested at December 31 2011 559433

F-33

16 EARNINGS PER SHARE AND UNIT AND SHAREHOLDERS EQUITY AND CAPITAL

Earnings per share and Shareholders Equity

The following is summary of the elements used in calculating basic and diluted earnings per share

For the year ended December 31

2011 2010 2009

Dollars and shares in thousands except per share amounts

Loss from continuing operations 5052 11996 21291

Noncontrolling interests in the Operating Partnership 265 656 1150

Noncontrolling interest in subsidiaries 2810 1755 665Distribution to Preferred Shares 1218 ______________ ______________

Loss from continuing operations attributable to the Companys

common shareholders 8815 13095 20806

Total discontinued operations 7499 5977 20959

Noncontrolling interests in the Operating Partnership 300 275 1090Total discontinued operations attributable to the Companys

common shareholders 7199 5702 19869

Net loss attributable to the Companys common shareholders 1616 7393 937

Weighted-average shares outstanding 102976 93998 70988

Share options and restricted share units________________ ________________ ________________

Weighted-average diluted shares outstanding 102976 93998 70988

Earning loss per Common Share

Continuing operations 0.09 0.14 0.29

Discontinued operations 0.07 0.06 0.28

Basic and diluted loss per share 0.02 0.08 0.01

Earnings per unit and Capital

The following is summary of the elements used in calculating basic and diluted earnings perunit

For the year ended December 31

2011 2010 2009

Dollars and units in thousands except per unit amounts

Loss from continuing operations 5052 11996 21291Limited Partnership interest of third parties 265 656 1150

Noncontrolling interest in subsidiaries 2810 1755 665Distribution to Preferred units 1218 ______________ ______________

Loss from continuing operations attributable to common unitholders 8815 13095 20806

Total discontinued operations 7499 5977 20959

Limited Partnership interest of third parties 300 275 1090Total discontinued operations attributable to common unitholders 7199 5702 19869

Net loss attributable to common unitholders 1616 7393 937

Weighted-average units outstanding 102976 93998 70988

unit options and restricted unit units

Weighted-average diluted units outstanding 102976 93998 70988

Earning loss per Common unit

Continuing operations 0.09 0.14 0.29

Discontinued operations0.07 0.06 0.28

Basic and diluted loss per unit 0.02 0.08 0.01

F-34

For the year ended December 31 2011 the Company declared cash dividendsper preferred share/unit of $0.39

For the years ended December 31 2011 2010 and 2009 the potentially dilutive shares/units of approximately 1378000

1177000 and 547000 respectively were not included in the earnings per share/unit calculation as their effect is antidilutive

For theyears

ended December 31 2011 2010 and 2009 the Company declared cash dividends per common share/unit of $0.29

$0145 and $0.10 respectively

The Operating Partnership units and common units have essentially the same economic characteristics as they unit equally in the

total net income or loss and distributions of the Operating Partnership An Operating Partnership unit may be redeemed for cash or at

the Companys option common units on one-for-one basis Outstanding noncontrolling interest units in the Operating Partnership

were 4674136 4737136 and 4809636 as of December31 20112010 and 2009 respectively There were 122058919 and

98596796 common units outstanding as of December 31 2011 and 2010 respectively

Issuance of Common and Preferred Shares

On August 19 2009 the Company sold 32.2 million common shares of beneficial interest for net proceeds of approximately $161.9

million In April 2009 the Company commenced the sale of up to 10 million common shares pursuant to continuous offering

program which was amended on January 26 2011 as amended the Sales Agreement to include the sale of up to 15 million

common shares Pursuant to the program we may sell shares in amounts and at times to be determined by us Actual sales will be

determined by variety of factors to be determined by us including market conditions the trading price of our common shares and

determinations by us of the appropriate sources of funding In connection with the offering program the Company engaged sales

agent who receives compensation equal to up to three percent of the grosssales price per common share for any shares sold pursuant

to the program During the year ended December 31 2010 the Company sold 5.6 million shares under the program at an average sales

price of $8.62 per share resulting in net proceeds of $47.6 million

On September 16 2011 the Company amended its sales agreement with Cantor Fitzgerald Co the Sales Agent dated April

2009 and as amended on January 26 2011 to increase the number of common shares that the Sales Agent may sell under the Sales

Agreement from 15 million to 20 million During the year ended December 31 2011 the Company sold 140000 shares under the

program at an average sales price of$lO.75 per share resulting in net proceeds of$l.5 million $60.1 million of net proceeds and 8.2

million shares sold with an averagesales price of $7.30 since program inception in 2009

On October 28 2011 the Company completed public offering of 23 million common shares at public offering price of $9.20

which reflects the full exercise by the underwriters of their option to purchase million shares to cover over-allotments The Company

received approximately $202.5 million in net proceeds from the offering after deducting the underwriting discount and other estimated

offering expenses

During November 2011 the Company completed an underwritten public offer of 3.1 million of the Companys Series preferred

shares at public offering price of $25.00 per share for gross proceeds of $77.5 million The financing provided approximately $74.8

million in net proceeds to the Company after deducting the underwriting discount and offering expenses

The Company used the net proceeds from the 2011 common and preferred public offerings to fund portion of the cash purchase

price of the Storage Deluxe Acquisition on November 2011

17 INCOME TAXES

Deferred income taxes are established for temporary differences between financial reporting basis and tax basis of assets and

liabilities at the enacted tax rates expected to be in effect when the temporary differences reverse valuation allowance for deferred

tax assets is provided if the Company believes that it is more likely than not that all or some portion of the deferred tax asset will not

be realized No valuation allowance was recorded at December 31 2011 or 2010 The Company had net deferred tax assets of $0.4

million and $0.3 million which are included in other assets as of December 31 2011 and 2010 respectively The Company believes

it is more likely than not the deferred tax assets will be realized

F-35

The following table discloses the income tax rates for the periods identified below

For the year ended December 31

2011 2010 2009

34% 34% 34%

4% 4% 4%

38% 38% 38%

As of December 312011 2010 2009

dollars in thousands

Assets Liabilities Assets Liabilities Assets Liabilities

Deferred taxes

Share based

compensation 3349 3045 2971 2689 2177 1933

Other 134 34 258

Deferredtaxes 3483 3045 3005 2689 2435 1933

18 PRO FORMA FINANCIAL INFORMATION UNAUDITED

During the year ended December 31 2011 the Company acquired 27 self-storage facilities for an aggregate purchase price of

approximately $467.1 million see note

The condensed consolidatedpro

forma financial information set forth below reflects adjustments to the Companys historical

financial data to give effect to each of the acquisitions and related financing activity including the issuance of common shares that

occurred during 2011 as if each had occurred as of January 2010 The unaudited pro forma information presented below does not

purport to represent what the Companys actual results of operations would have been for the periods indicated nor does it purport to

represent the Companys future results of operations

The following table summarizes on pro forma basis the Companys consolidated results of operations for the year ended

December 31 2011 and 2010 based on the assumptions described above

2011 2010

unaudited

in thousands except per share data

Pro forma revenue

Pro forma loss from continuing operations

Loss per common share from continuing operations

Basic and diluted as reported

Basic and diluted as proforma

The following summarizes the amounts of revenue and earnings of the 2011 and 2010 acquisitions since the acquisition dates

included in the consolidated statements of operations for the years ended December 31 2011 and 2010

Year ended December 31

2011 2010

in thousands

Total revenue 19743

Net loss 4841

Effective income tax rate

Statutory federal income tax rate

State and local income taxes

Effective income tax rate

263399

1385

0.09

0.04

238421

26500

0.14

0.30

1998

141

F-36

19 SELECTED QUARTERLY FINANCIAL DATA UNAUDITED

The following is summary of quarterly financial information for the years ended December 31 2011 and 2010 in thousands

except per share data

Total revenues

Total operating expenses

Net income loss attributable to the CompanyBasic and diluted earnings loss per share

Three months ended

March 31 June 30 September 30 December 312011 2011 2011 2011

55752 57559 60341 63953

45989 46723 46407 52957

117 902 6828 80110.00 0.01 0.07 0.08

March 31

2010

49866

42914

34750.04

Three months ended

September 302010

53665

44440

14800.02

December 312010

54803

44523

20830.02

The summation of quarterly earnings pershare amounts do not necessarily equal the full year amounts The above information was

updated to reclassify amounts to discontinued operations see note 11

20 COMPREHENSIVE LOSS INCOME

The following is summary of comprehensive loss income for CubeSmart and CubeSmart L.P for the years ended December 31

2011 2010 and 2009 in thousands

Year Ended December 31

2011 2010 2009

12394 6153151 268 553

9796 6287 6374

On February 2012 the Company acquired one facility located in Houston Texas for $5.1 million Additionally on February 23

2012 the Company acquired one facility located in Dunwoody Georgia for $6.9 million In connection with these closings the

Company borrowed from its revolving credit facility

Also during February the Company closed on the purchase of four of the remaining Storage Deluxe facilities for an aggregate

purchase price of approximately $74.4 million and assumed mortgages related to the four properties acquired totaling $34.9 million

In connection with the closing the Company borrowed from its revolving credit facility The remaining two properties with an

aggregate purchase price of$ 128.3 million and assumed mortgages totaling $54.3 million are expected to close during March

Total revenues

Total operating expenses

Net income loss attributable to the CompanyBasic and diluted earnings loss per

share

June 30

2010

51395

45218

45210.05

NET INCOME LOSSOther comprehensive loss income

Unrealized loss gain on derivative financial instruments

Unrealized gain loss on foreign currency translation

COMPREHENSIVE LOSS INCOME

21 SUBSEQUENT EVENTS

2447 6019 332

F-37

CUBESMARTSCHEDULE III

REAL ESTATE AND RELATED DEPRECIATIONDecember 31 2011

Dollars in thousands

Gross Carrying Amount

Initial Cost at December 31 2011

Building and Costs Subsequent to Building and Accumulated Year Acquired

Description Square Footage Encumbrances Land Improvements Acquisition Land Improvements Total Depreciation Developed

Mobile AL 128871 226 2524 1375 301 3432 3733 1409 1997

Chandler AZ 47545 327 1257 260 327 1315 1642 315 2005

Glendale AZ 56850 201 2265 987 418 2985 3403 1094 1998

Green Valley AZ 25050 298 1153 124 298 1096 1394 235 2005

Mesa AZ 52375 920 2739 131 921 2442 3363 518 2006

MesaIIAZ 45445 731 2176 122 731 1949 2680 439 2006

Mesa III AZ 58189 706 2101 147 706 1910 2616 424 2006

Phoenix AZ 100387 1134 3376 282 1135 3138 4273 699 2006

PhoenixllAZ 83340 756 2251 1301 847 3106 3953 483 2006/2011

Scottsdale AZ 80425 443 4879 1685 883 6037 6920 2200 1998

Tempe AZ 53890 749 2159 168 749 2055 2804 423 2005

Tucson AZ 59350 188 2078 938 384 2775 3159 1010 1998

Tucson II AZ 43950 188 2078 898 391 2721 3112 971 1998

Tucson III AZ 49832 532 2048 149 533 1897 2430 408 2005

Tucson IV AZ 48040 674 2595 167 675 2381 3056 506 2005

Tucson VAZ 45184 515 1980 196 515 1881 2396 402 2005

Tucson VI AZ 40766 440 1692 161 440 1594 2034 353 2005

Tucson VII AZ 52688 670 2576 206 670 2404 3074 516 2005

Tucson VIII AZ 46600 589 2265 111 589 2046 2635 432 2005

Tucson IX AZ 67720 724 2786 323 725 2706 3431 567 2005

Tucson AZ 46350 424 1633 175 425 1565 1990 342 2005

Tucson XI AZ 42850 439 1689 358 439 1799 2238 380 2005

Tucson XII AZ 42325 671 2582 174 672 2381 3053 502 2005

Tucson XIII AZ 45792 587 2258 156 587 2083 2670 441 2005

Tucson XIV AZ 49095 707 2721 353 708 2679 3387 537 2005

Apple ValleyCA 73440 140 1570 1514 476 2565 3041 810 1997

Apple Valley II CA 61555 160 1787 1207 431 2523 2954 830 1997

Benicia CA 74770 2392 7028 102 2392 6132 8524 1238 2005

Cathedral City CA 109239 2194 10046 253 2195 8030 10225 1618 2006

Citrus Heights CA 75620 1633 4793 200 1634 4310 5944 914 2005

Diamond Bar CA 103034 2522 7404 147 2524 6498 9022 1366 2005

Escondido CA 142870 3040 11804 118 3040 11137 14177 2594 2007

FallbrookCA 46620 133 1492 1723 432 2886 3318 931 1997

Lancaster CA 60675 390 2247 917 556 2715 3271 811 2001

Long Beach CA 125091 3138 14368 388 3138 12921 16059 2454 2006

Murrieta CA 49835 1883 5532 123 1903 4821 6724 960 2005

North Highlands CA 57244 868 2546 231 868 2408 3276 539 2005

Orangevale CA 50317 1423 4175 229 1423 3807 5230 802 2005

Palm Springs CA 72675 1565 7164 101 1566 6329 7895 1206 2006

Palm Springs II CA 122250 2131 9758 323 2132 8816 10948 1715 2006

Pleasanton CA 85045 2799 8222 14 2799 7069 9868 1448 2005

Rancho Cordova CA 53978 1094 3212 172 1095 2921 4016 645 2005

Rialto CA 57411 899 4118 156 899 3735 4634 714 2006

Rialto II CA 99803 277 3098 1681 672 4031 4703 1370 1997

Riverside CA 67120 1351 6183 186 1351 5571 6922 1068 2006

Riverside II CA 85166 1170 5359 313 1170 4976 6146 983 2006

Roseville CA 59869 1284 3767 287 1284 3516 4800 752 2005

Sacramento CA 50664 1152 3380 194 1152 3090 4242 679 2005

Sacramento II CA 61888 1406 4128 134 1407 3673 5080 786 2005

SanBernardinolCA 31070 51 572 1139 182 1417 1599 421 1997

San Bernardino

IICA 41546 112 1251 1147 306 1910 2216 618 1997

San Bernardino

IIICA 35446 98 1093 1011 242 1692 1934 563 1997

San Bernardino

IV CA 83307 1872 5391 47 1872 4743 6615 1000 2005

San Bernardino

CA 56795 783 3583 428 783 3541 4324 692 2006

San Bernardino

VI CA 103530 1205 5518 193 1205 4540 5745 955 2006

San Bernardino

VII CA 78729 1475 6753 223 1290 6290 7580 1197 2006

San Bernardino

VIII CA 94529 1691 7741 244 1692 6158 7850 1310 2006

San Marcos CA 37430 775 2288 98 776 2054 2830 435 2005

Santa Ana CA 64071 1223 5600 220 1223 5093 6316 978 2006

South

Sacramento CA 52165 790 2319 222 791 2197 2988 482 2005

Spring Valley CA 55045 1178 5394 504 1178 5204 6382 990 2006

Temecula CA 81550 660 4735 1099 899 5208 6107 1580 1998

Temecula II CA 84398 3080 5839 117 3080 5847 8927 1370 2007

Thousand Palms CA 75345 1493 6835 369 1493 6309 7802 1240 2006

Vista CA 74405 711 4076 2249 1118 5415 6533 1456 2001

Vista II CA 147981 4629 13599 103 4629 11780 16409 2333 2005

Walnut CA 50708 1578 4635 136 1595 4084 5679 823 2005

West Sacramento CA 39790 1222 3590 133 1222 3209 4.431 644 2005

F-3

Gross Carrying Amount

Initial Cost at December 31 2011

Building and Costs Subsequent to Buildingand Accumulated Year Acquired

Description Square Footage Encumbrances Land Improvements Acquisition Land Improvements Total Depreciation Developed

Westminster CA 68098 1740 5142 274 1743 4676 6419 980 2005

Aurora CO 75827 1343 2986 224 1343 2715 4058 569 2005

Colorado Springs CO 47975 77 1717 275 77 1690 246 342 2005

Colorado

Springs II CO 62300 1832 657 2674 183 656 2466 3122 507 2006

Denver CO 59200 673 274 173 674 2492 3166 519 2006

Federal HeightsCO 54770 878 1953 178 879 1791 2670 363 2005

Golden CO 87334 1683 3744 310 1684 3435 5119 696 2005

Littleton CO 53490 1268 2820 152 1268 2505 3773 499 2005

Northgenn CO 52102 862 1917 260 862 1855 2717 379 2005

Btoomfied CT 48700 78 880 2222 360 2783 3143 976 1997

Branford CT 50679 217 2433 1181 504 2878 3382 998 1995

Bristol CT 47400 1819 316 72 1819 2773 4592 654 2005

East Windsor CT 45700 744 1294 39 744 1472 2216 351 2005

Enfield CT 52875 424 2424 38 473 2240 2.713 688 200

Gales Ferry CT 54230 240 2697 1400 489 3480 3969 1293 1995

Manchesler CT 47.125540 3096 338 563 2722 3285 798 2002

Manchester CT 52725 996 1731 173 996 1647 2643 38 2005

Milford CT 44885 87 105 1.081 274 1750 2024 616 1994

Monroe CT 58500 2004 3483 537 2004 3499 5503 889 2005

Mystic CT 50725 136 1645 1.794 410 2869 3279 1019 1994

Newington CT 42420 1059 1840 148 1059 1710 2769 388 2005

Newington CT 36140 91 1584 163 1505 2416 352 2005

Old Saybrook CT 86.950 3092 5374 375 3092 4968 8060 tt67 2005

Old Saybrook II CT 26425 1135 1.973 204 1135 1882 3017 449 2005

Shelton CT 78465 1594 9032 1.594 9038 10632 23 20South Windsor CT 72125 90 1127 1088 272 1.824 2096 621 1994

Stamford CT 28957 1941 3374 62 194 2944 4885 693 2005

Washington DC 63085 871 12759 299 894 12013 12907 2566 2008

Washington DC 83016 9100 3152 13612 14 3154 13624 16778 20Boca Raton FL 37958 529 3054 1485 813 3655 4468 1036 2001

BoyntonBeach FL 61.967 667 3796 1618 958 4367 5325 1260 2001

BoyntouBeach FL 61727 1030 2968 236 1030 2822 3852 605 2005

Bradenton FL 68391 1180 3324 196 1180 3073 4253 683 2004

Bradenton II FL 87855 193 5561 554 1931 5383 7314 1156 2004

Cape Coral FL 76627 472 2769 2431 830 4395 5225 1546 2000

Dania Beach FL 172568 3584 10324 983 3584 9.905 13489 2151 2004

Dania FL 58270 205 2068 1362 48 2773 3254 929 1994

Davie FL 81135 1268 7183 720 1373 6005 7378 1439 2001

Deerfield Beach FL 57280 946 2999 1942 1311 4516 5827 1374 1998

Delray Beach FL 67813 798 4539 605 883 4183 5066 1280 2001

Fernandina Beach FL 110995378 4222 3488 643 7109 7752 1833 1996

Ft Lauderdale FL 70063 937 3646 2351 1384 5427 681 1640 1999

Ft Myers FL 67558 303 3329 681 328 3537 3865 1260 1998

Jacksonville FL 80326 1862 5362 15 1862 4710 6572 877 2005

Jacksonville II FL 65270 950 7004 32 950 6369 7319 1.508 2007

Jacksonville Ill FL 65575 860 7409 933 1670 6960 8630 1615 2007

Jacksonville IV FL 77525 870 8049 975 165 8199 9850 1883 2007

Jacksonville FL 82435 1220 8210 214 1220 7888 9108 1830 2007

Lake Worth FL 161808 183 6.597 6902 183 11863 12046 4086 1998

Lakeland FL 49095 896 992 256 1379 1635 491 1994

Kendall FL 75395 2350 8106 75 2350 7413 9763 1741 2007

Lutz FL 66895 90 2479 155 901 2.295 3196 507 2004

Lutz 11 FL 69.232 992 2860 197 992 2673 3665 623 2004

Murgate FL 54185 161 1.763 1811 399 3004 3403 1027 1994

Margate FL 65186 132 1473 1783 383 2745 3128 882 1996

Merrit Island FL 50417 716 2983 507 796 2827 3623 740 2000

Miami FL 46825 179 1999 1699 484 3117 360 114 1995

Miami FL 67060 253 2544 1415 56 3190 375 1087 1994

Miami Ill FL 150590 4577 13185 456 4577 12015 16592 2291 2005

MiamilVFL 76352 1852 10494 744 1963 11128 1309 655 2011

Naples FL 48150 1070 90 1010 2427 270 3103 3373 1080 1996

Naples 11 FL 65850 148 1652 4238 558 5265 5823 1736 1997

Naples Ill FL 80218 139 1561 3940 598 4543 5141 1756 1997

Naples IV FL 40600 262 2980 54 407 3338 3745 1322 1998

Ocoee FL 76100 1286 3705 82 1286 3319 4605 686 2005

Orange City FL 59586 1191 3209 107 1191 2883 4074 629 2004

Orlando FL 52170 187 2088 637 240 2630 2870 1220 1997

Orlando 11 FL 63084 1589 4576 73 1589 4081 5670 842 2005

Orlando III FL 104140 1209 7768 23 1209 6680 7889 1092 2006

Orlando IV FL 76565 633 3587 49 633 3636 4269 202 2010

Oviedo FL 4925 440 2824 484 440 2822 3262 525 2006

Pembroke Pines FL 6732 337 3772 2633 953 5744 6697 2118 1997

Royal Palm

Beach FL 98961 205 2148 2697 741 389 4632 1525 1994

Royal Palm Beach

II FL 81405 1640 8607 132 1640 8225 9865 1919 2007

Sanford FL 61810 453 2911 128 453 2540 2993 427 2006

Sarasota FL 71102 333 3656 1224 529 4.184 4713 1454 1998

SI Augustine FL 59725 135 1515 3243 383 4253 4636 1421 1996

Stuart FL 86913 324 3625 2801 685 6000 6685 2.188 1997

SW Ranches FL 64955 3867 1390 7598 89 1390 6795 8185 1590 2007

Tampa FL 83.638 2670 6249 68 2670 5782 8452 1383 2007

Wesl Palm

Beach FL 68031 719 3420 1504 835 4007 4842 1204 2001

West Palm

Beach FL 94503 2129 8671 242 2129 7364 9493 1661 2004

AlpharettaGA 90485 806 4720 932 967 4124 5091 1116 2001

Austell GA 83625 2174 1635 471 129 1643 4243 5886 718 2006

Decalur GA 148480 616 6776 164 616 6854 7470 2780 1998

Norcross GA 85420 514 2930 73 632 2972 3604 821 2001

Peachtree CityGA 49875 435 2532 557 529 250 3030 706 2001

F-39

Gross Carrying Amount

Initial Cost at December 31 2011

Building and Costs Subsequent to Building and Accumulated Year Acquired

Description Square Footage Encumbrances Land Improvements Acquisition Land Improvements Total Depreciation Developed

Smyrna GA 56820 750 4271 167 750 3491 4241 965 2001

Sneliville GA 80000 1660 4781 145 1660 4338 5998 676 2007

Suwanee GA 85240 1737 5010 136 1737 4524 6261 705 2007

Suwanee 11 GA 79640 800 6942 622 6642 7264 1560 2007

Addison IL 31325 428 3531 239 428 3304 3732 721 2004

Aurora IL 74435 644 3652 123 644 3293 3937 713 2004

Bartlett IL 51425 931 2493 191 931 2350 3281 508 2004

HanoverJL 41178 1126 2197 198 1126 2093 3219 451 2004

Beliwood IL 86650 1012 5768 697 1012 5233 6245 1507 2001

Des Ptaines IL 6. 74400 1564 4327 313 1564 4057 5621 870 2004

Elk GroveVillage

IL 64129 1446 3535 248 1446 3292 4738 735 2004

Glenview IL 100115 3740 10367 252 3740 9274 13014 1998 2004

Gurnee IL 80300 1521 5440 237 1521 4968 6489 1106 2004

Harvey IL 60090 869 3635 144 869 3294 4163 713 2004

Joliet IL 72765 547 4704 186 547 4267 4814 920 2004

Kildeer IL 46285 2102 2187 32 1997 2030 4027 435 2004

Lombard IL .. 58188 1305 3938 604 1305 4023 5328 900 2004

Mount Prospect IL 65000 1701 3114 250 1701 2957 4658 639 2004

Mundelein IL 44700 1498 2782 163 1498 2571 4069 566 2004

North Chicago IL 53350 1073 3006 273 1073 2881 3954 642 2004

Plainfield IL 53800 1770 1715 177 1770 1637 3407 353 2004

Plainfieldll IL 51900 694 2000 122 694 1833 2527 380 2005

SchaumburgIL 31160 538 645 155 538 683 1221 150 2004

Streamwood IL 64305 1447 1662 264 1447 1676 3123 382 2004

Warrensville IL 48796 1066 3072 140 1066 2812 3878 571 2005

Waukegan IL 79500 1198 4363 271 1198 4049 5247 881 2004

West Chicago IL 48175 1071 2249 211 1071 2158 3229 473 2004

Weslmont IL 53450 1155 3873 103 1155 3461 4616 749 2004

Wheeling IL 54210 857 3213 254 857 3035 3892 670 2004

Wheeling II IL 67825 793 3816 349 793 3665 4458 798 2004

Woodridge IL 50262 2260 943 3397 159 943 3102 4045 669 2004

Indianapolis IN 73014 406 3496 211 406 3238 3644 710 2004

Baton Rouge LA 35200 112 1248 539 139 1569 1708 538 1997

Baton Rouge II LA 80277 118 1181 1846 331 2606 2937 1004 t997

Stidell LA 79540 188 3175 1642 795 3591 4386 964 2001

Boston MA 33286 538 3048 37 538 3085 3623 176 2010

Boston II MA 60595 1516 8628 295 1516 7123 8639 1957 2002

Leominster MA 53823 90 1519 2399 338 3517 3855 1184 1998

Medford MA 58815 3091 1330 7165 79 1330 6677 8007 1569 2007

Battimore MD 93350 1050 5997 1077 1173 5745 6918 1729 2001

CalifomiaMD 77865 1486 4280 142 1486 3860 5346 837 2004

Gaithersburg MD 87045 3124 9000 364 3124 8199 11323 1719 2005

Laurel MD 162792 1409 8035 3512 1928 9575 11503 2682 2001

Temple Hills MD 97200 1541 8788 2193 1800 9227 11027 2601 2001

Grand Rapids Ml 87381 185 1821 1487 325 2863 3188 1145 1996

Romulus MI 42050 308 1743 690 418 1950 2368 497 1997

WyomingMl 91158 191 2135 1145 354 2793 3147 1138 1996

Gulfport MS 61251 172 1928 1028 338 2734 3072 1066 1997

Belmont NC 81448 385 2196 688 451 2300 2751 672 2001

Burlington NC 109396 498 2837 454 498 2721 3219 828 2001

Burlington II NC 42305 320 1829 320 340 1749 2089 505 2001

Cary NC 112124 543 3097 473 543 3347 3890 1087 2001

Charlotte NC 69000 782 4429 1424 1068 4736 5804 1205 1999

Raleigh NC 48675 209 2398 266 296 2532 2828 980 1998

Brick NJ 51725 234 2762 1377 485 3406 3891 1182 1994

CherryllitlNJ 52600 222 1260 62 222 1321 1543 69 2010

CliftonNJ 105550 4346 12520 151 4346 11132 15478 2174 2005

Cranford NJ 91250 290 3493 2217 779 4619 5398 1528 1994

East Hanover NJ 107579 504 5763 3861 1315 7792 9107 2608 1994

Egg Harbor NJ 39425 104 592 18 104 609 713 36 2010

Egg Harbor NJ 71175 284 1608 157 284 1766 2050 99 2010

Elizabeth NJ 38830 751 2164 253 751 2128 2879 460 2005

FairviewNJ 27925 246 2759 342 246 3025 3271 1324 1997

Hamilton NJ 70550 1885 5430 212 1893 4960 6853 839 2006

Hoboken NJ 34180 1370 3947 569 1370 4016 5386 868 2005

Linden NJ 100425 517 6008 2036 1043 6636 7679 2113 1994

Morris

Township NJ 71776 500 5602 2567 1072 7553 8625 3027 1997

Parsippany NJ 66325 475 5322 1949 844 6801 7645 2718 1997

Randolph NJ 52465 855 4872 1269 1108 4854 5962 1346 2002

Sewell NJ 57830 484 2766 1239 706 3184 3890 913 2001

Albuquerque NM 65927 1039 3395 178 1039 3030 4069 673 2005

Albuquerque II NM 58598 1163 3801 224 1163 3423 4586 727 2005

Albuquerque III NM 57536 664 2171 207 664 2020 2684 445 2005

Carlsbad NM 39999 490 1613 99 491 1451 1942 326 2005

DemingNM 33005 338 1114 156 339 1079 1418 251 2005

Las Cruces NM 65790 965 3268 165 969 3091 4060 677 2005

Lovington NM 15750 222 740 169 561 730 129 2005

Silver City NM 26975 153 504 120 153 526 679 127 2005

Truth or Consequences

NM 24010 10 34 84 Il 89 100 35 2005

Las Vegas NV 48332 1851 2986 293 1851 2973 4824 653 2006

Las Vegas II NV 48850 3354 5411 148 3355 5040 8395 1108 2006

JamaicalNY 88415 2043 11658 1281 2043 10455 12498 2596 2010

JamaicallNY 91300 5330 30202 22 5330 30224 35554 440 2011

BronxlNY 69015 2014 11411 366 2014 11777 13791 199 2010

F-40

Gross Carrying Amount

Initial Cost at December 31 2011

Building and Coats Subsequent to Building and Accumulated Year Acquired

Description Square Footage Encumbrances Land Improvements Acquisition Land Improvements Total Depreciation Developed

BronxllNY 90320 3156 25 31586 31586 539 2011

Bronx 111 NY 106065 6385 36181 14 6385 36195 42580 650 201

Bronx IV NY 73845 22074 13 22087 22087 425 20Bronx NY 54733 17556 13 17569 17569 383 2011

Bronx VI NY 30785 16803 12 16815 16.815 137 2011

Brooklyn NY 57020 1795 10172 12 1795 10293 12088 288 2010

Brooklyn II NY 60945 1601 9073 365 1601 9438 11039 461 2010

Brooklyn III NY 41600 2739 15522 14 2739 15536 18275 358 2011

Brooklyn IVNY 37717 2257 12789 13 2257 12802 15.059 296 2011

BrooklynVNY 47070 2346 13293 12 2346 13305 15.65 278 2011

Brooklyn VI NY 74305 4162 23584 14 4162 23598 27760 43 2011

Brooklyn VII NY 72710 5538 31381 11 5538 31392 36930 695 201

WyckoflNY 61960 1961 11113 91 1961 11204 13165 335 2010

New Rochelle NY 48415 1673 4827 182 1673 4398 6071 880 2005

North Babylon NY 78188 225 2514 4039 568 5889 6457 2097 1998

Riverhead NY 38340 1068 1149 162 1068 1122 2190 280 2005

Southold NY 58901 II 2079 2238 206 2079 2089 4168 505 2005

Tuckohoe NY 52958 2336 13236 II 2.336 13247 15583 197 2011

White Plains NY 87855 3295 18049 689 3295 18738 22033 1185 2011

WoodhavenNY 45800 1991 11285 12 1991 11297 13288 225 2011

Yorktown NY 78615 2354 13338 13 2354 13351 15705 348 2011

Boardman OH 65495 64 745 2275 287 2226 2513 1130 1980

Centerville OH 80690 471 3705 145 471 336 3832 733 2004

Cenlerville II OH 43100 332 1757 210 332 1725 2057 379 2004

Cleveland OH 46050 525 2592 92 524 2357 2881 545 2005

Cleveland II OH 58425 290 1427 156 289 1385 1674 333 2005

Columbus OH 72155 1234 3151 31 1239 2766 4005 515 2006

Dayton OH 43100 323 2070 137 323 1925 2248 427 2004

DaytonllOH 48149 44 2176 183 440 2084 2524 468 2005

Grove City OH 89290 1756 4485 70 1761 3971 5732 731 2006

Hilliard OH 89690 1361 3476 132 1366 3151 4517 574 2006

Lakewood OH 39287 405 854 468 405 1250 1655 799 1989

Marblehead OH 52300 374 1843 163 373 1771 2144 414 2005

Mason OH 33900 127 1419 130 149 1498 1647 634 1998

MiamisburgOH 59930 375 2410 295 375 2369 2744 510 2004

Middleburg

Heights OH 93025 63 704 2072 332 2230 2562 680 1980

North Olmsted OH 48665 63 704 1260 214 1586 1800 547 1979

North Olmsled II OH 47850 290 1129 1092 469 1998 2467 1203 1988

North Randall OH 80049 515 2323 2902 898 4367 5265 1372 1998

Reynoklsburg OH 66895 1290 3295 196 1295 3057 4352 561 2006

Slrongsville OH 43507 570 3486 265 570 3435 4005 768 2007

Warrensville

Heights OH 90281 525 766 2855 935 3042 3977 987 1980

Westlake OH 62750 509 2508 16 508 2339 2847 523 2005

Youngstown OH 65950 67 1778 204 1228 1432 568 1977

Levittown PA 76180 926 5296 1060 926 5386 6312 1621 2001

Norristown PA 52001 655 3709 14 655 3723 4378 79 201

Philadelphia PA 97439 1461 8334 1472 1461 7120 8581 1863 2001

Alcoa TN 42250 254 2113 106 254 1922 2176 409 2005

Antioch TN 76160 588 4906 219 588 4425 5013 866 2005

Cordova TN 54125 296 2482 198 297 2330 2627 508 2005

Cordova II TN 67800 429 3580 244 429 3330 3759 627 2006

Knoxville TN 29337 99 1113 229 102 1310 1412 551 1997

Knoxville II TN 37864 117 1308 292 129 1561 1690 630 1997

Knoxville III TN 45736 182 2053 750 331 2608 2939 976 1998

Knoxville IV TN 58752 158 1771 758 310 2346 2656 848 1998

Knoxville TN 42790 134 1493 439 235 1800 2035 809 1998

Knoxville VI TN 63440 439 3653 96 440 3245 3685 683 2005

KnoxvilleVllTN 55094 312 2594 142 312 2374 2686 505 2005

Knoxville VIII TN 95868 585 4869 234 586 4432 5018 923 2005

Memphis TN 92320 677 3880 1359 677 4387 5064 1220 2001

Memphis II TN 71710 395 2276 442 395 2214 2609 640 2001

Memphis III TN 40507 212 1779 186 213 1717 1930 403 2005

Memphis IV TN 38678 160 1342 219 160 1369 1529 327 2005

Memphis TN 60120 209 1753 558 210 206 2271 455 2005

Memphis VI TN 108996 462 3851 272 462 3594 4056 688 2006

Memphis VII TN 115703 215 1792 469 215 2006 2221 421 2006

Memphis VIII TN 96060 355 2959 288 355 2831 3186 549 2006

Nashville TN 103910 405 3379 387 405 3273 3678 668 2005

Nashville II TN 83484 593 4950 164 593 4430 5023 887 2005

Nashville III TN 101475 416 3469 134 416 3101 3517 642 2006

Nashville IV TN 102450 5353 992 8274 250 992 7386 8378 1420 2006

Auslm TX 59520 2239 2038 130 2410 1719 4129 413 2005

Aaslm II TX 65241 734 3894 200 738 3641 4379 667 2006

Austin III TX 70560 1030 5468 99 1035 4945 5980 857 2006

Baytown TX 38950 946 863 244 948 981 1929 197 2005

Bryan TX 60450 1394 1268 119 1396 1215 2611 270 2005

College Station TX 26559 812 740 105 813 736 1549 171 2005

Dallas TX 58532 2475 2253 238 2475 2182 4657 481 2005

l3enlon TX 60836 1906 553 2936 172 569 2754 3323 483 2006

El Paso ITX 59452 1983 1805 206 1984 1756 3740 377 2005

El Paso II TX 48704 1319 1201 144 1320 1176 2496 250 2005

El Paso 111 TX 71276 2408 2192 149 2409 2040 4449 426 2005

El Paso IV TX 67058 2073 1888 2074 1629 3703 361 2005

El Paso TX 62290 1758 1617 114 1761 1504 3265 321 2005

ElPasoVITX 36620 660 607 140 662 654 1316 148 2005

El Paso VII TX 34545 563 517 75 565 515 1080 118 2005

Fort Worth TX 50621 1253 1141 110 1253 1091 2344 234 2005

Fort Worth II TX 72725 868 4607 204 874 4279 5153 785 2006

Frisco TX 50854 1093 3148 81 1093 2835 3928 587 2005

Frisco II TX 71299 3100 1564 4507 78 1564 4021 5585 823 2005

Frisco III TX 74965 1147 6088 20 1154 5594 6748 1021 2006

F-41

Gross Carrying Amount

Initial Cost at December 31 2011

Buildingand Costs Subsequent to Building and Accumulated Year Acquired

Description Square Footage Encumbrances Land Improvements Acquisition Land Improvements Total Depreciation Developed

Frisco IV TX 74835 719 4072 86 719 4159 4878 278 2010

Garland TX 70100 3032 751 3984 368 767 3880 4647 680 2006

Garland 11 TX 68425 862 4578 101 862 4161 5023 685 2006

Greenville TX 59385 1848 1682 67 1848 1515 3363 315 2005

Greenville It TX 44900 1337 1217 79 1337 1125 2462 232 2005

Houston TX 100530 1420 1296 224 1422 1338 2760 290 2005

Houston It TX 71300 1510 1377 27 1512 1207 2719 287 2005

Houston Ill TX 61120 481 575 524 254 576 697 1273 151 2005

Houston IV TX 43975 960 875 19 96 940 1901 191 2005

HoustonV TX 125930 3987 1153 6122 413 1156 5840 6996 1027 2006

Houston VI TX 54680 575 524 5649 983 5765 6748 699 2011

Keller TX 61885 2350 890 4727 96 890 4283 5173 786 2006

La Porte TX 44800 842 761 376 843 1026 1869 274 2005

Lewisvilte TX 58140 1733 476 2525 270 492 2489 2981 459 2006

Mansfield TX 63075 837 4443 100 843 4031 4874 739 2006

McKinney TX 47020 1632 1486 117 1634 1386 3020 272 2005

McKinney II TX 70050 4011 855 5076 63 857 4561 5418 832 2006

North

Richland Hills

TX 57200 2252 2049 108 2252 1876 4128 404 2005

Roanoke TX 59300 1337 1217 98 1337 1144 2481 249 2005

San Antonio TX 73305 2895 2635 192 2895 2468 5363 492 2005

San Antonio It TX 73230 t047 5558 64 1052 4991 6043 823 2006

San Antonio III TX 71775 996 5286 175 996 4870 5866 732 2007

Sherman TX 54975 1904 1733 79 1906 1569 3475 323 2005

Sherman II TX 48425 1703 1337 1217 115 1337 1157 2494 239 2005

Spring TX 72751 580 3081 98 580 2827 3407 550 2006

Murray UT 60380 3847 1017 353 3848 t214 5062 248 2005

Murray II UT 71221 2147 567 326 2148 792 2940 182 2005

Sat Lake City UT 56446 2695 7t2 300 2696 900 3596 202 2005

Salt Lake Cily Ui 51676 2074 548 287 2075 746 282 160 2005

Fredericksburg VA 69475 t680 4840 247 1680 4465 6145 811 2005

Fredericksburg II VA 61207 1757 5062 286 1758 4719 6477 864 2005

DuluIb GA 71235 373 2044 119 373 2163 2536 64 2011

Norcross GA 52020 366 2025 66 366 2091 2457 448 2011

Lawrenceville GA 74065 546 2903 205 546 3108 3654 139 201

Leesburg VA 85503 4884 1746 9894 1746 9897 11643 155 2011

District Heights MD. 78920 1527 8313 340 1527 8653 10180 229 2011

Burke Lake VA 90727 7423 2093 10940 982 2093 11922 14015 864 2011

McLearen VA 69240 1482 8400 75 1482 8474 9956 293 2010

Mannasas VA 73045 860 4872 41 860 4913 5773 95 2010

Milwaukee WI 58500 375 4333 198 368 3948 4316 860 2004

USIFB 11899 11899 11899 871

Corporate Office 4850 4850 4850 645

24420369 393117 1629987 230555 417067 1674448 2091515 311837

This facility is part of Yasky Loan portfolio with balance of $80000 as of December 31 2011

This facility is part of the YSI 20 Loan portfolio with balance of $60551 as of December 31 2011

This facility is part of the YSI Loan portfotio with balance of $74834 as of December 31 2011

This facility is part of the YSI 28 Loan portfolio with balance of $1509 as of December 3120This facility is part of the YS 30 Loan portfolio with balance of $7049 as of December 2011

This facility is part of the YS 31 Loan portfolio with balance of$t3414 as of December 31 20This facilily is part of the YSI 32 Loan portfolio with balance of $5950 as of December 2011

This facility is part ofthe YSI 33 Loan portfolio with balance of$I 1157 as of December 31 201This

facilityis

part of the YSI 35 Loan portfolio with balance of $4464 as of December 31 2011

Thisfacility

is

part of the YSI 41 Loanportfolio with balance of $3775 as of December 31 2011

This facilily ispart of the YSI 48 Loan portfolio with balance of $24870 as of December 31 2011

Deprecialion on the buildings and improvements is recorded on straight-line basis over their estimated useful lives which range from five to 39 years

The aggregate cost for Federal income tax purposes was approximately $2.0 billion and $1.5 billion at December31 2011 and 2010 respectively

Activity in real estate facilities during 2011 2010 and 2009 was as follows in thousands

2011 2010 2009

Storage facilities

Balance at beginning of year 1743021 1774542 1888123

Acquisitions improvements 460357 96612 13345

Fully depreciated assets 43770 79211 40859Dispositions and other 56458 49865 89668Contstruction in progress 4319 943 3601

Balance at end of year 2107469 1743021 1774542

Accumulated depreciation

Balanceatbeginningofyear 314530 344009 328165

Depreciation expense 58560 64387 73569

Fully depreciated assets 43770 79211 40503Dispositions and other 10571 14655 17222

Balance at end of year 318749 314530 344009

Net Storage facilityassets

1788720 1428491 1430533

F-42

Exhibit 31.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICERPURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

Dean Jemigan certify that

have reviewed this Annual Report on Form 10-K of Cube Smart

Based on my knowledge this report does not contain any untrue statement of material fact or omit to state material fact

necessary to make the statements made in light of the circumstances under which such statements were made not misleading with

respect to the period covered by this report

Based on my knowledge the financial statements and other financial information included in this report fairly present in all

material respects the financial condition results of operations and cash flows of the registrant as of and for the periods presented in

this report

The registrants other certifying officers and are responsible for establishing and maintaining disclosure controls and

procedures as defined in Exchange Act Rules 3a-1 5e and 5d-1 5e and internal control over financial reporting as defined in

Exchange Act Rules l3a-15f and lSd-15f for the registrant and have

Designed such disclosure controls and procedures or caused such disclosure controls and procedures to be designed under

our supervision to ensure that material information relating to the registrant including its consolidated subsidiaries is made

known to us by others within those entities particularly during the period in which this report is being prepared

Designed such internal control over financial reporting or caused such internal control over financial reporting to be

designed under our supervision to provide reasonable assurance regarding the reliability of financial reporting and the

preparation of financial statements for external purposes in accordance with generally accepted accounting principles

Evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our

conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report

based on such evaluation and

Disclosed in this report any change in the registrants internal control over financial reporting that occurred during the

registrants most recent fiscal quarter the registrants fourth fiscal quarter in the case of an annual report that has materially

affected or is reasonably likely to materially affect the registrants internal control over financial reporting and

The registrants other certifying officers and have disclosed based on our most recent evaluation of internal control over

financial reporting to the registrants auditors and the audit committee of the registrants Board of Trustees or persons performing the

equivalent functions

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting

which are reasonably likely to adversely affect the registrants ability to record process summarize and report financial

information and

Any fraud whether or not material that involves management or other employees who have significant role in the

registrants internal control over financial reporting

Is Dean Jernigan

Dean Jernigan

ChiefExecutive Officer

Date February 29 2012

F-43

Exhibit 31.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

Timothy Martin certify that

have reviewed this Annual Report on Form 10-K of CubeSmart

Based on my knowledge this report does not contain any untrue statement of material fact or omit to state material fact

necessary to make the statements made in light of the circumstances under which such statements were made not misleading with

respect to the period covered by this report

Based on my knowledge the financial statements and other financial information included in this report fairly present in all

material respects the financial condition results of operations and cash flows of the registrant as of and for the periods presented in

this report

The registrants other certifying officers and are responsible for establishing and maintaining disclosure controls and

procedures as defined in Exchange Act Rules 3a- 15e and 5d- 15e and internal control over financial reporting as defined in

Exchange Act Rules 13a-15f and 15d-15f for the registrant and have

Designed such disclosure controls and procedures or caused such disclosure controls and procedures to be designed under

our supervision to ensure that material information relating to the registrant including its consolidated subsidiaries is made

known to us by others within those entities particularly during the period in which this report is being prepared

Designed such internal control over financial reporting or caused such internal control over financial reporting to be

designed under our supervision to provide reasonable assurance regarding the reliability of financial reporting and the

preparation of financial statements for external purposes in accordance with generally accepted accounting principles

Evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our

conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report

based on such evaluation and

Disclosed in this report any change in the registrants internal control over financial reporting that occurred during the

registrants most recent fiscal quarter the registrants fourth fiscal quarter in the case of an annual report that has materially

affected or is reasonably likely to materially affect the registrants internal control over financial reporting and

The registrants other certifying officers and have disclosed based on our most recent evaluation of internal control over

financial reporting to the registrants auditors and the audit committee of the registrants Board of Trustees or persons performing the

equivalent functions

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting

which are reasonably likely to adversely affect the registrants ability to record process summarize and report financial

information and

Any fraud whether or not material that involves management or other employees who have significant role in the

registrants internal control over financial reporting

/s/ Timothy Martin

Timothy Martin

ChiefFinancial Officer

Date February 29 2012

F-44

Exhibit 31.3

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICERPURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

Dean Jernigan certify that

have reviewed this Annual Report on Form 10-K of CubeSmart L.P

Based on my knowledge this report does not contain any untrue statement of material fact or omit to state material fact

necessary to make the statements made in light of the circumstances under which such statements were made not misleading with

respect to the period covered by this report

Based on my knowledge the financial statements and other financial information included in this report fairly present in all

material respects the financial condition results of operations and cash flows of the registrant as of and for the periods presented in

this report

The registrants other certifying officers and are responsible for establishing and maintaining disclosure controls and

procedures as defined in Exchange Act Rules 3a- 15e and 5d- 15e and internal control over financial reporting as defined in

Exchange Act Rules 3a-1 5f and 5d- 15f for the registrant and have

Designed such disclosure controls and procedures or caused such disclosure controls and procedures to be designed under

our supervision to ensure that material information relating to the registrant including its consolidated subsidiaries is made

known to us by others within those entities particularly during the period in which this report is being prepared

Designed such internal control over financial reporting or caused such internal control over financial reporting to be

designed under our supervision to provide reasonable assurance regarding the reliability of financial reporting and the

preparation of financial statements for external purposes in accordance with generally accepted accounting principles

Evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our

conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report

based on such evaluation and

Disclosed in this report any change in the registrants internal control over financial reporting that occurred during the

registrants most recent fiscal quarter the registrants fourth fiscal quarter in the case of an annual report that has materially

affected or is reasonably likely to materially affect the registrants internal control over financial reporting and

The registrants other certifying officers and have disclosed based on our most recent evaluation of internal control over

financial reporting to the registrants auditors and the audit committee of the registrants Board of Trustees or persons performing the

equivalent functions

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting

which are reasonably likely to adversely affect the registrants ability to record process summarize and report financial

information and

Any fraud whether or not material that involves management or other employees who have significant role in the

registrants internal control over financial reporting

Is Dean Jernigan

Dean Jernigan

ChiefExecutive Officer

Date February 29 2012

F-45

Exhibit 31.4

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICERPURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

Timothy Martin certify that

have reviewed this Annual Report on Form 10-K of CubeSmart L.P

Based on my knowledge this report does not contain any untrue statement of material fact or omit to state material fact

necessary to make the statements made in light of the circumstances under which such statements were made not misleading with

respect to the period covered by this report

Based on my knowledge the financial statements and other financial information included in this report fairly present in all

material respects the financial condition results of operations and cash flows of the registrant as of and for the periods presented in

this report

The registrants other certifying officers and are responsible for establishing and maintaining disclosure controls and

procedures as defined in Exchange Act Rules 3a- 15e and 5d- 15e and internal control over financial reporting as defined in

Exchange Act Rules 13a-15f and 15d-15f for the registrant and have

Designed such disclosure controls and procedures or caused such disclosure controls and procedures to be designed under

our supervision to ensure that material information relating to the registrant including its consolidated subsidiaries is made

known to us by others within those entities particularly during the period in which this report is being prepared

Designed such internal control over financial reporting or caused such internal control over financial reporting to be

designed under our supervision to provide reasonable assurance regarding the reliability of financial reporting and the

preparation of financial statements for externalpurposes in accordance with generally accepted accounting principles

Evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our

conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report

based on such evaluation and

Disclosed in this report any change in the registrants internal control over financial reporting that occurred during the

registrants most recent fiscal quarter the registrants fourth fiscal quarter in the case of an annual report that has materially

affected or is reasonably likely to materially affect the registrants internal control over financial reporting and

The registrants other certifying officers and have disclosed based on our most recent evaluation of internal control over

financial reporting to the registrants auditors and the audit committee of the registrants Board of Trustees or persons performing the

equivalent functions

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting

which are reasonably likely to adversely affect the registrants ability to record process summarize and report financial

information and

Any fraud whether or not material that involves management or other employees who have significant role in the

registrants internal control over financial reporting

Is Timothy Martin

Timothy Martin

ChiefFinancial Officer

Date February 29 2012

F-46

Exhibit 32.1

Certification of Chief Executive Officer and Chief Financial Officer

Pursuant to 18 U.S.C Section 1350 As Adopted Pursuant to Section 906 of

The Sarbanes-Oxley Act of 2002

The undersigned the ChiefExecutive Officer and ChiefFinancial Officer of CubeSmart the Company each hereby certifies

pursuant to 18 U.S.C Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 that

The Annual Report on Form 10-K of the Company for the year ended December 31 2011 the Report filed on the date

hereof with the Securities and Exchange Commission fully complies with the requirements of Section 13a or 15d of the

Securities Exchange Act of 1934 as amended and

The information contained in the Report fairly presents in all material respects the financial condition and results of

operations of the Company

Is Dean Jernigan

Dean Jernigan

ChiefExecutive Officer

Date February 29 2012

Is Timothy Martin

Timothy Martin

ChiefFinancial Officer

Date February 29 2012

signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the

Company and furnished to the Securities and Exchange Commission or its staff upon request

F-47

Exhibit 32.2

Certification of Chief Executive Officer and Chief Financial Officer

Pursuant to 18 U.S.C Section 1350 As Adopted Pursuant to Section 906 of

The Sarbanes-Oxtey Act of 2002

The undersigned the Chief Executive Officer and ChiefFinancial Officer of Cubesmart L.P the Company each hereby

certifies pursuant to 18 U.S.C Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 that

The Armual Report on Form 10-K of the Company for the year ended December 31 2011 the Report filed on the date

hereof with the Securities and Exchange Commission fully complies with the requirements of Section 13a or 15d of the

Securities Exchange Act of 1934 as amended and

The information contained in the Report fairly presents in all material respects the financial condition and results of

operations of the Company

Is Dean Jernigan

Dean Jernigan

ChiefExecutive Officer

Date February 29 2012

/s/ Timothy Martin

Timothy Martin

ChiefFinancial Officer

Date February 29 2012

signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the

Company and furnished to the Securities and Exchange Commission or its staff upon request

F-48

CuSMSM

self storage logistics

BOARD OF TRUSTEES CORPORATE OFFICERS CORPORATE INFORMATION

William Diefenderferiii

Dean Jernigan Transfer Agent Investor Relations

Chairman of the Board Chief Executive Officer American Stock Transfer 460 East Swedesford Road

Partner Oiefenderfer Hoover Trust Co LLC Suite 3000

Boyle Wood Christopher Marr Operations Center Wayne PA 19087

President and 6201 15th Avenue 610.293.5700

Dean Jernigan Chief Investment Officer Brooklyn NY 11219

Chief Executive Officer 877237.6885 Form 10-K

Timothy Martin The Annual Report on Form

Piero Bussani Chief Financial Officer Stock Listing 10-K filed with the Securities

General Counsel and CubeSmart trades on the and Eschasge Commission

Executive Vice-President Jeffrey Foster New York Stock tschange is available to shareholders

WHM LLC Senior Vice President and under the symbol CUBE without charge upon writtes

Chief Legal Officer and Secretary request to

Marianne Keier Annual Meeting Investor Relations

Partner Keler-Kershow LLC The annual meeting of 460 East Swedesford Road

shareholders will be held at Suite 3000

David LaRue Four Seasons Hotel Wayne PA 19087

President and One Logan Square 610.293.5700

Chief Executive Officer Philadelphia PA 19103

Forest City Enterprises Inc on May 30 2012 Internet

Financial statements and

John Remondi Corporate Headquarters other information are

President and 460 East Swedesford Road available electronically on

Chief Operating Officer Suite 3000 CubeSwarts web site at

SLM Corporation Wayne PA 19087 www.cubesmart.com

Jeffrey Rogatz

Managing Director

Robert Baird Co

CubeSmart submitted to the New York Stock Exchange the certification of the Chief Executive Officer certifying that he is not aware of any violation of the New York Stock

Exchange corporate governance listing standards in effect at the time of the submission of such certificate

In addition we have filed as exhibits 31.1 31.2 31.3 and 31.4 to the Annual Report on Form 10-K for the year ended December 31 2011 the certifications of the Chief Executive

Officer and Chief Financial Officer respectively required by Section 302 of the Sarbanes-Osley Act of 2002 regarding the quality of CubeSmart and CubeSmart L.P.s public

disclosure

Forward-looking Statements

This Annual Report contains certain forward-looking statements within the meaning of the Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act

of 1934 Such statements are based on assumptions and expectations that may not be realized and are inherently subject to risks uncertainties and other factors many of which

cannot be predicted with accuracy and some of which might not even be anticipated Although we believe the expectationsreflected in these forward-looking statements are

based on reasonable assumptions future evests and actual results performance transactions or achievements financial and otherwise may differ materially from the results

performance transactions or achievements expressed or implied by the forwardlooking statements Risk uncertainties and other factors that might cause such differences some

of which could be material include but are not limited to national and local economic business real estate and other market conditions the competitive environment in which

the Company operates the esecution of the Companys business plan financing risks including the risk of over-leverage and the corresponding risk of default on our mortgage

and other debt increases in interest rates and operating costs the Companys ability to maintain its statuses REIT for federal income tax purposes acquisition and development

risks changes in real estate and zoning laws or regulations risks related to natural disasters potential environmental and other liabilities and other factors affecting the real

estate industrygenerally or the self-storage industry in particular and other risks identified in this Annual Report and from time to time in other reports we file with the Securities

and Exchange Commission or in other documents that we publicly disseminate We undertake no obligation to publicly update or revise theue forward-looking statementu

whether ass result of new information future events or otherwise except as may be required by securities laws

CuSMIrself storage logistics

460 East Swedesford Road

Suite 3000

Wayne PA 19087

www Cu besma rt .com